Air India likely to end fiscal year with Rs650m positive EBITDA

Mumbai: In line with its projections in its turnaround plan, Air India is expected to end the fiscal year with a positive EBITDA of Rs650 million (Dh43.9 million) on the back of higher passenger revenue and yield as well as passengers numbers.

“We are expecting to end the fiscal with a positive EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) of Rs650 million. This will come on the back of better yield, increased passenger revenue and seat factor,” a source in Air India told PTI.

Though the increase will be a marginal one, they said it would be a big boost as the airline was Rs22.3 billion EBITDA negative in 2011-12.

According to official figures, the ailing national carrier turned EBITDA positive to the tune of Rs487.5 million between April and December last year. In the first nine months of the current fiscal, Air India earned an operating revenue of Rs114 billion while its operating expenses were Rs139.5 billion, resulting in an operating loss of Rs2.5 billion, the figures showed. Since the merger of erstwhile Air India and Indian Airlines in 2007, Air India has not posted profit even once. The Economic Survey, presented in the Parliament last month, had expressed optimism about the debt-ridden carrier’s recovery saying that the company would turn EBITDA positive in the current financial year. The Survey also took cognisance of the improved performance of Air India in the ongoing financial year. Besides, Air India is also likely to clock a higher number of passengers this year at 13 million as against 12.4 million it ferried last year, they said. “We also expect the yield to go up by 17 per cent and passenger revenue by right per cent this financial year,” they said adding the overall seat factor was likely to go up by four per cent. According to the Survey, the airline had registered all-round enhanced performance in the April-September period this fiscal, with an on-time performance at 85 per cent, passenger load factor at 70.9 per cent and yield at Rs4.31 per revenue passenger per kilometre. “It deems in line with the targets set in the financial Turnaround Plan for the airline approved in April 2012 for improving the operational and financial performance,” the government’s major financial document said.