Air India to increase revenue by 9.7% in 2016-17
MUMBAI: National carrier Air India is expecting to increase annual revenue for 2016-17 by 9.7% to Rs 22,521 crore, minister of state for civil aviation Jayant Sinha said in reply to a query in the Lok Sabha today.
"The main reason for this increase in revenues is an improvement in capacity utilization in terms of Revenue Passenger Kilometers (RPKMs) by 6.8% and an increase in Passenger Carriages by 6.2% when compared to the previous year 2015-16. The Passenger Load Factor is also expected to increase by 1.2% in absolute terms i.e. from 75.6% in 2015-16 to 76.4% in 2016-17," said Sinha. He added that an increase in utilization of the Boeing 777 plane which it deploys to the US and UK also helped.
The government has approved a turnaround plan (TAP)and a financial restructuring plan (FRP) for operational and financial turnaround of the airline. The TAP and FRP provides equity infusion of Rs 30,231 crore upto year 2021 subject to achievement of certain milestones.
Sinha said Air India has made "substantial progress in both operational as well as financial areas as per TAP milestones.
It has initiated various cost-cutting strategies such as route rationalization of erstwhile Air India and Indian Airlines (which were merged in 2007), rationalization of certain loss making routes, phasing out of old fleet and consequential reduction in maintenance cost, joining global airline body Star Alliance, enhanced utilization of new fleet resulting in production of higher Available Seat Kilometers (ASKMs), closure of overseas offline offices at certain locations among other initiaves.
"The main reason for this increase in revenues is an improvement in capacity utilization in terms of Revenue Passenger Kilometers (RPKMs) by 6.8% and an increase in Passenger Carriages by 6.2% when compared to the previous year 2015-16. The Passenger Load Factor is also expected to increase by 1.2% in absolute terms i.e. from 75.6% in 2015-16 to 76.4% in 2016-17," said Sinha. He added that an increase in utilization of the Boeing 777 plane which it deploys to the US and UK also helped.
The government has approved a turnaround plan (TAP)and a financial restructuring plan (FRP) for operational and financial turnaround of the airline. The TAP and FRP provides equity infusion of Rs 30,231 crore upto year 2021 subject to achievement of certain milestones.
Sinha said Air India has made "substantial progress in both operational as well as financial areas as per TAP milestones.
It has initiated various cost-cutting strategies such as route rationalization of erstwhile Air India and Indian Airlines (which were merged in 2007), rationalization of certain loss making routes, phasing out of old fleet and consequential reduction in maintenance cost, joining global airline body Star Alliance, enhanced utilization of new fleet resulting in production of higher Available Seat Kilometers (ASKMs), closure of overseas offline offices at certain locations among other initiaves.
