Financial Daily from THE HINDU group of publications
Saturday, May 21, 2005
Financial Daily from THE HINDU group of publications Saturday, May 21, 2005 |
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Logistics
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Airlines IA to offer excess capacity to other airlines K. Giriprakash
Bangalore , May 20 INDIAN Airlines is all set to make money out of some of its liabilities, including excess manpower and unprofitable North-East routes. The Indian Airlines Director for Marketing, Ms Manjira Khurana, told Business Line that the airline is trying to make use of its excess capacity apart from the experience it has acquired over the years in ground handling and maintenance to add to its topline growth. Ms Khurana said surplus ASKM (available seat kilometres) on the north-eastern sector will be offered to those domestic carriers which have a comprehensive agreement as for ground handling and maintenance. "It is an internal policy decision to offer some of our services to other domestic airlines if they have a comprehensive arrangement with us," Ms Khurana said. She said Kingfisher Airlines, which is the latest airline to hit the domestic skies, has a similar arrangement. For 2004-05, Indian Airlines earned Rs 200 crore from ground handling for other airlines. The airline recently tied up with Kingfisher Airlines wherein it will provide ground handling, engineering and aircraft maintenance support. The deal will make Indian Airlines richer by Rs 120 crore. In return, Indian Airlines has offered its surplus ASKMs on the north-eastern sector to Kingfisher Airlines. But this particular deal is valid till the airline has surplus seats. Ms Khurana said the airline has been approached by other domestic carriers that are keen on using these facilities. "Certain airlines are already in talks with us," she said. Indian Airlines will be setting up separate joint ventures to offer engineering and ground handling facilities to other airlines. Indian Airlines recorded a net profit of Rs 17.5 crore for 2004-05, which was around 60 per cent lower than the previous year. As per the budget estimates, the airline's profits are again expected to further dip by 10 per cent to around Rs 11 crore. The airline has attributed the drop in profits to higher aviation turbine fuel prices. The operating revenues for 2004-05 increased 13 per cent to Rs 5,247 crore while the operating expenses rose 15 per cent to Rs 5,193 crore.
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