Air India flying high: Passenger revenues up 17% at Rs 15,081 crore in April-December

National carrier Air India’s passenger revenue grew 17% during April-December of the current fiscal due to better aircraft utilisation and rationalisation of routes, chairman and managing director Pradeep Singh Kharola said on Wednesday.

Air India got Rs 15,081 crore from domestic and international ticket sales during April-December 2018 as compared to Rs 12,918 crore in the year-ago period. The passenger count was up 7% y-o-y to 16.13 million in the first three quarters of this fiscal. Typically, Air India’s earns 65% of its passenger revenue from international flights.

The airline added 37 flights on new and existing routes during FY18. However, the operating costs remained high during this period as aviation turbine fuel was up around 30% y-o-y. “We have flown our aircraft for longer duration as compared to previous years and used pilot duties more judiciously to improve our revenues. Capacity has increased on profitable routes. This includes night-time flights,” Kharola told reporters.

For instance, Air India introduced non-stop flights from Kolkata and Bengaluru to Bangkok while direct flights to the Thai capital from Chandigarh and Bhubaneshwar were terminated. The airline was incurring yearly loss of Rs 8-9 crore on these flights.

According to the Public Enterprises Survey 2017-18, Air India’s net loss declined 17.6% year-on-year to Rs 5,337 crore during 2017-18 due to lesser allowance for exceptional items like balance payable to employees and duty credit entitlement under the Served From India scheme. Kharola said the airline is rationalising its catering costs on overseas flights by carrying food from India. Air India flights are carrying food to destinations like Stockholm, Copenhagen, Birmingham and Madrid to be used for the return journey.

“Catering costs for us are around Rs 600-800 crore a year. Catering in India is 3-4 times cheaper as compared to catering in the West. To save our costs, the food is taken from here in India in chillers and then it is heated whenever it has to be served,” Kharola said.

The government is eyeing around $1 billion (about Rs 7,000 crore) from the sale of national carrier Air India in the next financial year, a government official said. The government will initiate the process of strategic disinvestment of Air India in the second half of 2019-20 and in between it would work towards selling some of its subsidiaries and monetise assets.

Air India has a debt burden of Rs 55,000 crore.