Airline News
Air India back to profit?
January 20th 2015
Air India, which made the headlines last month when it transpired that only nine of its 370 daily departures are profitable, reported a surprise net profit of 146 million rupees (US$2.36 million) for the month of December, driven by a low crude oil price and growth in both passenger and cargo revenue, official sources have told The Times of India. Read More »
While the numbers were encouraging, analysts cautioned that December is traditionally a peak month for most carriers, and as such Air India’s results are less telling as a predictor for 2015. Mahesh Sharma, India’s minister of state for civil aviation, said in Delhi last month the airline lost 75.6 billion rupees ($1.22 billion) in 2011-12; 54.9 billion in 2012-13 and 53.9 billion in 2013-14.
In other news, Air India has kicked off another price war when it released all-inclusive domestic fares for as low as 1,557 rupees ($25). The sale was quickly followed by similar offers from rival, Jet Airways. Mumbai-based Jet Airways’ main promoter and chairman, Naresh Goyal, has meanwhile pledged his entire 51% shareholding in the carrier, valued at over 26 billion rupees, to state-run Punjab National Bank with a “non-disposal undertaking”. The reason for the pledging of shares was not disclosed.
UAE-based Etihad Airways holds a 24% stake in Jet as a strategic partner with the remaining shares owned by institutional and retail investors. As of September 30, Jet sat on a loan balance of 98 billion rupees, almost twice its valuation, though down 7% from 106 billion six months earlier.