National carrier Air India is expected to cut its net loss by about a third to Rs 3,500 crore during Fy16 as a result of a significant reduction in fuel costs and improvement in operating performance, two airline officials told FE on Wednesday, quoting the airline’s recently released budget estimates.

The airline expects an operating profit of about Rs 10 crore during Fy16, its first annual operating profit since the implementation of the government-approved turnaround plan (TAP) in 2012.

Mumbai: Air India Ltd, the country’s largest airline by fleet size, is expected to post a small operating profit in the year starting 1 April, in a first sign that the ailing national carrier is beginning to turn around.

Most of the national flag airline’s units, including its ground-handling business, regional airline operations and international low-fare services, are also expected to post net profit for the next financial year, according to Air India’s budget estimates for the next financial year.

The Directorate General of Civil Aviation (DGCA) recently issued show-cause notices to a little over two and a half dozen Air India pilots for reporting late. The regulator said they did not follow regulations and the airline’s operation manual on reporting time, adding that was tantamount to a violating safety. Pilots, however, contend this might be outside DGCA’s remit.

DGCA sent the notice after surprise checks at Mumbai and Delhi airports earlier this month. Last month, it sent a notice to a Jet Airways pilot for being late by 10 minutes. This comes in the wake of the Air India management’s move to cut salaries of staff responsible for flight delays.

Air India is cutting down on flights to loss-making foreign routes and ramping up its domestic network in its summer schedule. Air India deploys its Airbus A320 fleet both on domestic and Gulf routes. The airline operates about 15 flights daily to Gulf sectors using the A320 planes. Over the next few months, Air India will be replacing all its A320-operated Gulf routes with Boeing 787 planes. “Currently, the Airbus A320 fleet utilisation is about 10-11 hours. The A320 aircraft will now be flown only on domestic routes and few South Asian routes. This will enable us to add more flights and routes within India. We plan to increase our domestic capacity in the summer schedule,” the spokesperson added.

Air India has defended the sale of five Boeing 777-200LR aircraft to Etihad Airways, saying retaining the fuel-guzzling planes would have aggravated its losses.

The government-owned carrier had acquired eight Boeing 777-200LRs in 2007 for $127 million each (Rs 787 crore as of Monday’s conversion rate). Air India sold five to Etihad for $68 million (Rs 421 crore).

The government is unlikely to go for any dilution of its stake in national carrier Air India in the near future and divestment may be “looked at” once the airline improves its balance sheet.

Noting that Air India has seen a marked improvement in its on-time performance, which is being monitored by the Civil Aviation Ministry on a day-to-day basis in the last few weeks, highly-placed sources said that the reason for flight delays like shortage of flight and cabin crew is being addressed by the management.

State-owned carrier Air India (AI), which began its recruitment process recently, is finding it hard to get the right kind of candidates, compelling it to re-advertise its requirement for 197 commander and senior trainee pilots.

A spokesperson of the national flag carrier said there were just not enough qualified candidates available in the market.

The union of Air India pilots, Indian Commercial Pilots Association, has directed its members not to operate flights with commanders which the airline proposes to hire on contract.

The Association, which represents pilots on narrow body Airbus A320 fleet has also asked the management to withdraw the recruitment advertisement. Last week, the airline had announced it would hire 197 pilots including commanders and senior trainee pilots for its Airbus A320 fleet.

An Air India pilots union has directed its members not to operate flights with commanders which the airline proposes to hire on contract.

The Indian Commercial Pilots Association which represents pilots on narrow body Airbus A320 fleet also has asked the management to withdraw the recruitment advertisement. Last week the airline announced it will hire 197 pilots including commanders and senior trainee pilots for its Airbus A320 fleet.

Air India (AI) is hiring nearly 200 pilots for its Airbus A320 planes, to meet a shortage caused by resignations, transfer of pilots to Boeing 787s and delays in training junior pilots for the rank of commander.

Government-owned AI has 60 Airbus A320 aircraft in various configurations and deploys these on the domestic network. A shortage of pilots and cabin crew is one reason for flight delays, the carrier's on-time performance being the lowest among its peers.

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