Air India posts operational profit for first time in 8 years

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Air India posted an operational profit of Rs.105 crore in 2015-16 compared with an operational loss of Rs.2,636 crore in 2014-15 due to an increase in traffic growth.

This is the first time the national carrier has posted an operational profit since it was merged with erstwhile Indian Airlines in 2007, the financial results of 2015-16 cleared by the airline’s auditors and approved by its Board showed.

A sharp decline in aviation turbine fuel prices helped it bolster operational profit to more than Rs.100 crore in 2015-16 even as the airline was earlier expecting an operational profit of Rs.8 crore.

Aviation fuel accounts for roughly 40 per cent of an airline’s operational costs. As the airline offered lower fares, it carried 18 million passengers in 2015-16 compared with 16.88 million passengers last year. Airline’s operational cost per average seat kilometre came down from Rs.4.59 in 2014-15 to Rs.3.88 in 2015-16.

Air India’s total revenue declined marginally by 0.42 per cent to Rs.20,526 crore in 2015-16 due to poor yields. “Yield fell by 7.7 per cent as the benefits of decrease in fuel cost was passed on to passengers,” an official said.