State-run Air India is eyeing its first operating profit since 2007-08, when it merged with Indian Airlines. The national carrier’s best operating performance in eight years comes at a time when crude oil prices have fallen sharply. Crude oil accounts for 40 to 50 per cent of airlines’ operating expense.
“Air India is expected to earn operating profit of Rs. 8 crore as compared to the operating loss of Rs. 2,636 crore in the previous year. This is the first time that the company is going to achieve operating profit since its merger in 2007-08,” said Mahesh Sharma, junior minister for aviation in a written reply in Rajya Sabha.
Private carriers such as IndiGo, SpiceJet and Jet Airways reported record quarterly profits in the December quarter on account of cheap oil and rising demand.
Air India was provided over Rs. 30,000 crore by the government in 2012 under a turnaround plan to keep it afloat.
The national carrier is likely to end 2015-16 with a loss of around Rs. 3,500 crore, which will be 40 per cent lower than the previous fiscal, according to media reports.