Air India chairman expects profit by 2014-15

Released on - Sunday,25 July , 2010 -18:49 54

State-run carrier Air India, struggling to cut losses, is hopeful of swinging into profit in 2014-15 as its turnaround plan takes shape, its chairman said on Sunday.

Air India's board met Sunday to outline a growth strategy for the carrier to combat growing competition, as part of a five-year turnaround plan ending 2014.

"We are confident that as the turnaround plan gathers pace, we will have a positive balance sheet (by) year 2014-15," Air India chairman Arvind Jadhav told reporters on Sunday evening.

The airline saw a rise in passenger traffic revenue of 28 percent, or 5.4 billion rupees (115 million dollars), from a year ago, officials said without disclosing details.

Air India's passenger load factor, the percentage of seats filled by fare-paying passengers -- an important barometer for efficiency -- also improved on both domestic and international routes.

"Air India is on a firm path of recovery. The financial data shows a rebound for the industry," India's civil aviation minister Praful Patel said.

Last week, the country's largest private sector airline Jet Airways said it jumped to a net profit in the three months to June, from a loss a year earlier.

The government has promised extra capital to strengthen Air India's weak balance sheet, if it boosts operations and cuts losses.

"The latest figures suggest this, but more needs to be done," Patel told reporters in India's financial capital Mumbai.

An eight-billion rupee cash injection was given last fiscal year and an additional 12 billion rupees is planned for allocation this fiscal year.

Air India's once-dominant market share has shrunk to 16.9 percent in the face of fierce competition from private and low-cost carriers, after India liberalised its commercial aviation market in the 1990s.

The carrier reported a loss of 54 billion rupees for the fiscal year ending March 2010, according to the government figures.

The turnaround plan involves no job cuts, a growth strategy for its low-cost carrier Air India Express and revenue enhancement through more third-party business.