Air India On Track to Profitability

Tuesday, 2nd September 2014 at 03:00am

Air India didn't mince words when it announced to the public that it is now on the path to profitability, following criticisms that it wasted a huge amount of money when it staged a pompous celebration last week, dubbed 'Air India Day'.

The public viewed the August 27 grandiose celebration as inconsistent to the airline's bleeding coffer. However, the airline officials quickly denied the allegations as baseless, adding that the airline is now on its way to financial recovery.

But the public, including the media, were not convinced as the state flag carrier has reported a net loss during the last fiscal year ending 2014. The airline, however, debunked the claim and reported a positive growth in its EBIDTA, from a mere Rs19 crore to Rs700 crore during the period.

Based on the EBIDTA report, the airline, therefore, is on track to being profitable by the year 2017.

Air India merged with Indian Airlines in 2007 after the government officially approved the union between the two state-owned carriers.

Since the merger, the surviving entity, Air India, has never been profitable and has continued its losing saga over the years. It was seeking huge capital infusion from the government to save the airline from possible bankruptcy which was imminent.

In 2012, the government finally made a daring rescue when it infused a massive Rs30,000 crore to the airline by 2020. The amount was approved on condition that the airline should meet certain requirements during the period until 2020.

The airline delivered the good news that it is on its way to recovery as projected. In fact, its planes are able to fill 80% of its seats, on average. It has also improved its on-time performance which forms part of the condition of the approved turnaround plan.

The airline's Chairman and Managing Director, Rohit Nandan, gave credit to the government's bailout, as well as its employees who continue to work in their best to attain their goal.

The financial support that the government has provided to Air India enables the airline to keep its normal operations, ensuring salary payment to its employees and business partners are paid on time.

In July this year, the airline was formally admitted to Star Alliance as its 27th full member airline, almost 3 years since its application was suspended.

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