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Journalism of Courage
State-owned Indian Airlines Ltd, the country’s largest domestic carrier, is facing its third straight annual loss as it battles a massive fuel price rise and a flat domestic travel market, its chief said.
Indian Airlines, whose privatisation was jettisoned in 2001 due to lack of investors interest, reported a net loss of Rs 247 crore in 2001-02, up 55 per cent from the previous year as its passenger traffic tumbled eight per cent.
“Fuel prices have increased, landing and navigation charges have risen, the exchange rate has been adverse and the air travel market is stagnant,” the IA chairman Sunil Arora said.
“Our initial calculations have all gone haywire,” he told Reuters. “Till this situation improves, we’re really working more to contain losses.”
And even though Indian Airlines’ passenger traffic jumped by around 10 per cent in 2002-03, he said, it represented no real growth as the year before was one of the worst in aviation history due to the September 11 attacks.
The number of its passengers this year was still lower than in 2000-01, the last ‘normal’ year, he added. The airline’s five-year fleet renewal plan could make it more attractive as it competes with rivals flying newer planes, he said, but would not predict when the government might decide on its $2.1 billion proposal to buy a mix of 43 Airbus A319s, A320s and A321s jets which its board approved last March.
With the dismal state of air traffic, Arora said the industry’s new practice of offering discounts on advance purchase tickets, was here to stay —at least until there was an ‘exponential’ rise in air travel. He said the airline’s costs had ballooned by Rs 670 crore so far this fiscal year, noting the price of aviation fuel in February was 30 per cent higher than last April. Its woes also reflected steep fuel taxes, costlier insurance and the cost of flying uneconomic routes. On a brighter note, operating performance was better with 95 per cent of flights on time, up from 65 per cent in the late 1990s, and aircraft utilisation was up 19 per cent from a few years ago.
