Air India balance sheet bleeds again, posts Rs246 crore operating loss in first quarter

Air India, which turned operationally profitable last fiscal, reported an operational loss of Rs 246.14 crore in the three months ended June 2016.

The operating loss in the first quarter of this financial year has come down from Rs 315.37 crore in the year-ago period, Minister of State for Civil Aviation Jayant Sinha informed the Lok Sabha on Thursday.   

"The target fixed by Air India for operating profit for the first quarter of 2016-17 was Rs 87.28 crore against which  the company has posted an operating loss of Rs 246.14 crore in the first quarter of 2016-17," he said in a written reply tothe Lok Sabha.

Sinha said the main reason for operating loss was the decline in "revenue yields by around six per cent over the budgeted target resulting in decline in passenger revenue". Besides, there was a fall in cargo revenue compared with budgeted estimates."The first quarter of the financial year is a lean traffic season for domestic aviation traffic and the samepicks up only in the second half of the year during which the company will be aiming at achieving an overall operatingprofit," Sinha said. 

Under the turnaround plan, the airline is projected to see an operating profit of Rs 1,086 crore in 2016-17. During the same period, net loss and revenues are expected to be Rs 1,989 crore and Rs 22,206 crore, respectively, as per the provisional figures.As part of the turnaround plan, the minister said that till date, Rs 23,933 crore has been released as equity support to Air India.   

Various steps such as rationalisation of certain loss making routes, closure of overseas offline offices at certainlocations and phasing out of old fleet and consequential reduction in maintenance costs have been initiated to reducethe airline's losses.