Business Daily from THE HINDU group of publications
Sunday, Aug 19, 2007
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Business Daily from THE HINDU group of publications Sunday, Aug 19, 2007 ePaper |
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Airlines Logistics - Outlook Indian hopes to post Rs 25-cr net in ’06-07
The airline reported a net profit of Rs 49.50 crore during 2005-06, down from Rs 65.61 crore during the previous year.
Ashwini Phadnis New Delhi, Aug. 18 The state-owned airline Indian expects to report a net profit of about Rs 25 crore for 2006-07, the last full year as a standalone airline. Sources told Business Line the profit was largely on account of incomes arising from sale and lease back of aircraft and depreciation of the ageing fleet. “The airline accounts are being finalised and should be released by the end of the year. The trends show that we are well on way to declare a profit for the fourth successive year.”. Indian reported a net profit of Rs 49.50 crore during 2005-06, down from Rs 65.61 crore during the previous year. Incidentally, the profit reported in 2004-05 was the highest recorded by the airline in the past 10 years. During 2006-07, the airline entered into a lease and sale back agreement for seven Airbus A-320 aircraft which were manufactured in 1989 and are owned by it. The airline hoped to generate more than Rs 550 crore through the transaction. While the official figures for 2006-07 are being firmed up, the airline reported depreciation worth Rs 297 crore in 2005-06. Stiff competition
The airline faced problems with its old fleet mainly on account of engine problems which affected its operations during 2006-07. Like other full services airlines, Indian also faced competition from low cost airlines that resulted in decline in yields from ticket sales and the increase in prices of aviation turbine fuel. The airline carried more than 69 lakh domestic passengers during January-December 2006, up from more than 58 lakh passengers carried during 2005-06. The year also saw the airline sign a deal with Airbus Industrie to buy 43 A-320 family of aircraft. The merger process was approved by the Government earlier this year and a new company, National Aviation Company Ltd, into which Indian and Air India would be amalgamated, has already been set up.
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