The Hindu Business Line : Air India posts Rs 134-cr net — Operating loss at Rs 189.72 cr in 2002-03

AIDED by an exceptional income arising from exchange rate gains and dividend from a subsidiary, international air carrier Air India has reported a net profit of Rs 133.86 crore during 2002-03.

The airline's net profit for 2002-03 has also been bolstered by a steep decline in interest cost, which stood at Rs 80.24 crore during 2002-03 as against Rs 193.65 crore in the previous year. It reported total revenues of Rs 5,657.87 crore during 2002-03 as against Rs 5017.36 crore.

However, the airline had actually registered an operating loss of Rs 189.72 crore during 2002-03, as against an operating loss of Rs 54.53 crore during the previous year.

The latest annual report of the airline for 2002-03, shows that Air India made net gains of about Rs 49 crore in exchange rate variations. The company also booked income from unutilised services (passenger/cargo) for Rs 250.6 crore as against an income level of Rs 210.42 crore.

Besides, booking income of Rs 20.3 crore on dividend from a subsidiary, the Hotel Corporation of India, the airline has also written back provisions worth Rs 17 crore that are considered to be no longer required.

The annual report, which was tabled in Parliament, shows that in the year under review the airline's operations were spread over 10 scheduled routes of which one route accounted for an operating profit of Rs 13.06 crore.

The other nine routes accounted for an operating loss of Rs 303.12 crore, while the domestic sector operations incurred an operating loss of Rs 31.62 crore. The hub and spoke operations with Indian Airlines contributed an operating loss of Rs 24.71 crore during the year.

The report adds that the factors, which contributed to the improved profitability, were reduction in financing cost, improved passenger and overall load factors, among others.

It points to the fact that although the number of employees have fallen from 17,185 during 2000-01 to 16,068 during 2002-03, the cost per employee in lakh of rupees has risen from Rs 30.65 to Rs 34.51. Besides, the revenue per employee has increased from Rs 30.40 lakh to Rs 35.21 lakh.

Similarly, passenger load factors have dropped from 73.1 per cent to 71.6 per cent. However, the figure was higher than 66.6 per cent passenger load factor recorded during 2001-02.

During 2002-03, the airline incurred about 20 per cent of its total expenses on fuel and oil for aircraft, while salaries and staff cost accounted for 15.8 per cent. In addition, landing, handling and navigation charges accounted for 11 per cent of expenses incurred during the year while crew cost accounted for 7 per cent and depreciation and obsolescence accounted for 8.9 per cent of the expenses.

Similarly, passengers accounted for 62.7 per cent of the revenue earned by the airline while handling and servicing revenue accounted for 10.5 per cent of revenue.

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