NEW DELHI, India – The finance department of Air India has asked its commercial department to carry out “necessary” changes in the national carrier’s network after it became clear that the airline will fail to meet its revenue target for February.
“There is a drop in the revenues that we had estimated for February and we are unlikely to achieve the target for the month,” the executive said, requesting anonymity. “The equity infusion for the year has also dried up and we are likely to get only Rs 50 crore during March. The finance department has asked the commercial department to do necessary changes in the network.”
The executive, however, added that the commercial department does not plan any immediate changes in the network.
“The finance department keeps raising these concerns as and when there is a dip in revenues,” the official said.
The drop in revenues comes after two successive months of profits. Air India posted a profit of Rs 13 crore in January and Rs 11 crore in December.
The state-run airline, however, is expected to narrow it losses this fiscal, mainly on account of a fall in crude prices. The airline had reported a loss of over Rs 5,000 crore in 2013-14.
The domestic airline industry though will continue to remain under stress. According to a Centre for Asia Pacific Aviation report published last June, the domestic airline industry is expected to post losses to the tune of Rs 7,807-8,408 crore in FY15 compared with over Rs 10,000 crore in the previous fiscal.