India’s national airlines Air India has something to cheer about after a long spell of disappointments, as they have registered a net profit of Rs 14.6 crore and operating profit of Rs 183 crore in the month of December, 2014. A year earlier, in December 2013, they had posted a loss of Rs 168.7 crore with operating profit of Rs 2 crore.
In December 2013, Air India has posted revenues of 1944 crore, which has increased by 6.5% to Rs 2070 crore in December, 2014. Overall, Air India estimates passenger revenues of Rs 16,500 crore and total revenue of Rs 21,500 crore during 2014-15.
Insiders are claiming that the drastic decrease in global crude oil, along with a healthy increase in passenger revenue via ticket sales have aided Air India to post a profit after a long dry spell.
Crude Oil and Operating Profit
In June 19th, global crude oil prices were hovering at $115.06, which has sharply declined to $48.73 as of now, thereby plunging 57.6%, which has certainly helped India’s national carrier.
Aviation experts have said that a 4% reduce in jet fuel prices directly results in addition of 2% to the operating margin. Currently, 45-50% of operating costs of any airlines is only composed of jet fuels.
Total of 1.61 million passengers used Air India in December, 2014, giving revenues of Rs 1563 crore compared to 1.37 million during the same period a year earlier, with passenger revenue of 1377 crore. This healthy increase of 17.5% in total passengers count and 13.5% in passenger revenue helped Air India to post a profit of Rs 14.6 crore for the reported period.
Additionally, a record 86% of Air India’s domestic flights were occupied in 2014, which is also being considered as one of the reasons for their improved performance. Air India’s inclusion into the famed Star Alliance last year has also helped them in some ways as passenger intake at Delhi, Mumbai, London and New York increased by 33%.
Air India is currently in the midst of a bailout package of Rs 30,000 crore provided by the Indian Govt. in 2012 to help Air India survive. In 2012-13, Air India posted loss of Rs 5100 crore, and Rs 7100 crore previous year. Overall, they have losses worth Rs 40,000 crore as of now.
These figures for December, 2014 has been shared by Air India officials with the Civil Aviation Ministry so that they become aware that Air India is still sticking on with their revival plan, and their financial state is improving.
50% Discount in Airfare: Spring Sales
Although a profit of Rs 14.6 crore a month will barely scratch the surface of a Rs 40,000 crore debt-ridden company, the mood is definitely upbeat.
Air India has launched a special discount offer called Spring Sales, where domestic tickets are available at a 50% discount between January 12 to January 18, for air travel between January 16 and April 30, 2015.
The discounted fares are starting from Rs 1557.
Here is a list of all discounted fares as announced by Air India under Spring Sale."Air India Finally Registers Profit; Announces 50% Discount on Airfares",