Air India is likely to enjoy acche din, as its low-cost international subsidiary Air India Express has turned the corner by reporting net profits for the first time since it started operations in April 2005.
The airline reported a profit of Rs.362 crore during the 2015-16 fiscal, helped by lower fuel prices and improved revenues over the past year on the back of flying more people per flight. The airline had incurred losses of Rs.62 crore during the 2014-15 fiscal.
Profits of AI express has come during the fiscal, when its parent Air India is also expected to make operational profit. The airline also found a mention in PM Narendra Modi's Independence Day speech, where he complimented the national carrier for improved financial performance.
The airline's board approved the audited financial results on Wednesday .K Shyam Sundar, chief executive officer of Air India Charters Ltd, the subsidiary that operates Air India Express, said that the turnaround could be achieved on the back of improved operations. “This turnaround should be attributed to the sustained efforts of all the Air India Express employees and the tremendous trust placed on us by our valued passengers. In purely business terms, the positive net outcome may be attributed to record levels of aircraft utilisation, PLF (Passenger Load Factors) and yields achieved in the year. Of course, low ATF rates also helped,“ Sundar said.
Analysts said a government company turning profitable is laudable. “When a private sector company turns profitable in today's time, you compliment it once.But when a government company takes advantage of the situation and turns profitable, it has to be doubly lauded. I say that because any government company has its own systemic disadvantages, which a private company will never have,“ said Jitendra Bhargava, former executive director of Air India. He said the moment a company turns profitable from loss, the company started thinking positive and `that will be the biggest achievement of these improved numbers'.