Indian Airlines wipes out 8-month losses
Giriprakash Krishnamoorthy
NEW DELHI, Dec 29: Indian Airlines (IA) said on Monday it had wiped out losses incurred in the first eight months of 1997-98 (April-March) despite poor growth in the sector. "We have broken even as of today. The airline will see a turnaround this (remaining four months) financial year," its spokesman said.He said in November 1997, the airline recorded a net profit of Rs 15.6 crore ($3.97 million).In the first quarter of the current year, the airline posted a net profit of Rs 9 crore. But in the second quarter, it incurred a net loss of Rs 22 crore. So for the first eight months of 1997-98, it made a small profit of Rs 2.6 crore, the spokesman said. "Though the numbers add up to a small profit, these are unaudited figures and by the end of the day, we would have broken even," he said. Indian Airline's projected growth rate of 6 per cent is expected to fall to around 4 per cent because of economic recession and political uncertainty in the country. "Tourism has been affected, there is recession,
political uncertainty. All these have affected our projections and our performance," the spokesman said.A statement said the airline and its subsidiary, Alliance Air, had projected a combined passenger traffic of 9.3 million for 1997-98. But after re-assessing the market potential, the figures had been scaled down to 8.5 million. The spokesman said even a 1 per cent drop in growth would mean a loss of some Rs 15 crore. Chairman and managing director PC Sen said last week that the airline had trimmed its profit estimate to Rs 40-45 crore from Rs 95 crore. Indian Airlines suffered a loss of Rs 14 crore in 1996-97. Sen was quoted by the Press Trust of India as saying that the domestic market had contracted since December 1995, and the airline's market share had not increased as per budget estimates. He said Indian Airline's and Alliance Air's market share had risen to 67.6 per cent in September, 1997 from 64.8 per cent in January, 1997 but had dipped to 65.4 per cent in October 1997. Indian Airline's
fleet comprises two Airbus Industrie A300-B4s, eight A300-B2s and 30 A320s.
Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.
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