Air India expected to earn more revenue in 2016-17: Sinha

The central government on Thursday said that national passenger carrier Air India is expected to earn more revenue in financial year 2016-17 as compared to 2015-16.

According to Minister of State for Civil Aviation Jayant Sinha, the airline is expected to report a rise of 9.7 per cent in its total revenue for 2016-17.

"In fact, the company is expecting to have a total revenue of Rs 22,521 crore as compared to the figure of Rs 20,526.11 crore in FY 2015-16, which is an improvement of around 9.7 per cent over the previous year," Sinha said in a written reply to a question in the Lok Sabha on Thursday.

"The main reason for this increase in revenues is an improvement in capacity utilisation in terms of revenue passenger kilometers (RPKMs) by 6.8 per cent and an increase in passenger carriages by 6.2 per cent when compared to the previous year 2015-16."

The minister pointed out that even passenger load factor is expected to increase by 1.2 per cent in absolute terms.

On April 12, 2012, the flag carrier got a new lease of life when the government approved a Rs 30,000 crore turnaround (TAP) and financial restructuring plans (FRP) spanning up to the year 2021.

The mega financial package came with stringent riders like maintaining high on-time performance and healthy load factors.

Sinha elaborated that since the implementation of Air India's Turnaround Plan, there has been a constant improvement in the airline's operational as well as financial performance.

The minister added that as part of the turnaround strategy, the airline has also initiated a number of steps to cut costs and losses.

Last month, Sinha informed the Rajya Sabha that Air India is also expected to post an "improved" operating profit margin in 2016-17 from Rs 105 crore reported in 2015-16.

The operating profit or earnings before interest and tax (EBIT) is the difference between gross profits and operating expenses before deduction of interest and taxes.

--IANS

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