Air India cuts losses significantly in FY16

The airline cut its losses significantly to Rs 3,837 cr in FY16 as compared to Rs 5,859 cr in the previous fiscal, a steep fall of 34%

Helped by low fuel price and higher aircraft utilisation, state-run carrier Air India has an operating profit of Rs 105 crore during the 2016 fiscal. This is the first time the airline has made operating profit since it was merged in 2007. The results were approved by the board today.

The airline cut its losses significantly to Rs 3,837 crore in FY 16 as compared to Rs 5,859 crore in the previous fiscal- a steep fall of 34 percent.

"Operating profits - Earnings before interest - cost improved in 2015-16 from a loss of Rs 2,636 crore in 2014-15 to a marginal profit of Rs 105 crores in 15-16," said a senior Air India official, who did not want to be identified. 

This is the first time that the merged entity - Air India and Indian Airlines were merged into one in 2007- made an operating profit since its merger. 

The airline said that capacity deployed with the same number of aircraft went up by 4.8 percent, resulting in improvement in seat factor from 73.7 percent to 75.6 percent.

Total revenue for the period, however, declined marginally by 0.42% from Rs 20,613 crore in 2014-15 to Rs 20,526 crore in 2015-16, said the airline.

The fall in revenues were due to falling yields. "Yields fell by 7.7 percent as the benefit of decrease in fuel cost was passed on to the passengers," the airline said.