You are here: Home » Companies » News
Business Standard

The Rs 30,000-cr bailout: Air India improves metrics but misses target

Govt had given Rs 30,000-cr bailout on condition that it will meet specified operational milestones

Air India

Arindam Majumder  |  New Delhi 

Air India
Air India

Air India’s performance has improved in the past two years but it has failed to meet critical targets set in a turnaround plan drawn up by the government.

The airline has principally failed to meet its target of bringing down the net loss to Rs 2,369 crore in 2016-17. The government in 2012 provided the airline a Rs 30,000 crore bailout on condition that it will meet specified operational milestones.

has submitted to the civil aviation ministry that it has increased core revenue, ancillary income and operating ratio in 2016-17 while trimming losses. In 2015-16, the airline posted an operational profit of Rs 105 crore, its first since its merger with Indian Airlines.

In 2016-17, has increased its revenue by almost 10 percent to Rs 22,521 crore by using capacity more efficiently. “We have improved our load factor to 76.4 per cent from 75 per cent last year. This may seem marginal, but consider the huge capacity deployment by private carriers on domestic routes,” an executive said.

The airline has trimmed losses by 5.05 per cent to Rs 3,643 crore in 2016-17 from Rs 3,836 crore in 2015-16. “We managed to do this despite increase in fuel and landing charges,” the Air India executive.

Air India’s fuel expenses rose to Rs 6,330 crore in 2016-17 from Rs 5,845.40 crore a year ago. “Staff costs increased by Rs 202 crore because of a wage award even though we rationalised staff strength as suggested,” the executive said.

Another airline executive said Air India’s interest outgo made it difficult to meet the targets. “Low-cost carriers started dominating with huge capacity and yields started dropping. We do not function like a private player, and there are multiple complexities to handle in regards to strategic decisions which do not exist for a private company,” the executive said.

Air India has consolidated its international network. It has doubled the frequency on the Delhi-San Francisco route, launched direct flights to Madrid and Vienna, and started Ahmedabad-London-Newark and Delhi-Cochin-Dubai flights. The airline has a market share of 13.6 per cent after private carriers IndiGo and Jet Airways.


Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, May 31 2017. 09:17 IST