Tuesday, March 12, 2013

Air India likely to emerge as cash surplus company next fiscal

NEW DELHI: Air India is likely to emerge as a cash surplus company in the next financial year with a net earning of over Rs 1,000 crore on the back of high passenger revenue and sale and lease back of Boeing 787 Dreamliners.

The Air India board, which met here today, finalised the annual budget for 2013-14 weeks after government approved the equity infusion of Rs 5,000 crore.

"The company is expected to be EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) positive in the year 2013-14 by about Rs 1040 crore," an Air India official said.

This is due to the increase in operating revenue by Rs 3,235 crore as a result of increase in capacity by 24 per cent.

"The total revenue next year is budgeted at Rs 19,393 crore - an increase of 20 per cent over the previous year," the official said.

Last week, a senior Air India official had said that the airline would end this financial year (2012-13) with EBITDA positive of Rs 65 crore.

The Board had also approved the sale and lease back proposal for the Boeing 787 and sale of Boeing 777-200 LR aircraft which would bring down the overall cost platform for Air India.

In the financial year 2013-14, the passenger load factor is expected to be around 72.5 per cent on the network, which is better than that envisaged in the Turnaround Plan (TAP).

The airline is expected to carry 16.12 million passengers in 2013-14, a growth of 14.7 per cent vis-a-vis 2012-13, the official said.

Air India also plans to operate new links in 2013-14 on the domestic and international sectors, besides improving connectivity from Delhi to tier II and tier III cities.

The national carrier is planning to expand to Australia, more destinations in Europe as well as to South East Asia in the next fiscal.

Apart from it, Air India would also be benefited with the the new competitive pricing agreement with the fuel companies.

Also, the interest expenses for the company were likely to come down by Rs 200 crore in 2013-14 due to the restructuring of certain working capital and long term loans.

"The government had recently approved infusion of further equity (in the year 2013-14) into Air India to the extent of Rs 5,000 crore, which would result in an improved net worth and debt-equity ratio for the airline," the official said.


Source:   http://economictimes.indiatimes.com

No comments:

Post a Comment