AI targets R1,000-cr Ebitda in 2013-14

Written by Debabrata Das | New Delhi | Updated: May 6 2013, 06:55am hrs
Plans for aggressive international expansion, resumption of Boeing 787 Dreamliner flights and continued improvements in operations will drive national carrier Air India to over R1,000 crore at the Ebitda (earnings before interest, tax, depreciation and ammortisation) level during 2013-14, a senior Air India official said.

Our efforts to improve performance by streamlining our network planning and route scheduling, fleet and cabin crew utilisation have already showed results and we were Ebitda-positive in 2012-13 with around R20 crore of Ebitda, said a senior Air India official.

The next year, we will continue with such initiatives to improve efficiency of our current operations as well as expanding on new international routes, get code shares and resuming flights on the Dreamliner.

The airline plans on starting five new international routes this year and is also exploring opportunities for new code-share agreements to expand its international network. The turnaround has been a result of changes brought about at various levels of the airline over the last couple of years, the official added.

We have worked intensively to improve network planning, crew management, hub control, e-commerce sales, product development and other such aspects, the official said. The results are just starting to flow in.

Air India's improvement in network planning is indicated by the increase in the number of domestic and international transfer passengers. After implementing five modules of a planning and scheduling tool in association with Sabre Airline Soultions, Air India now has 3,000 transfer passenger a day compared to 300 before the modules were implemented.

The flight planning systems also resulted in a combined saving of $3.8 million uptil September 2012 for Air India. The national carrier had set up an Integrated Operations Control Centre in early 2012, which had complete control and visibility of Air India fleet.

Similarly, the national carrier has implemented the Crew Management System in association with Sabre and Sheorey Digital Systems to digitise schedules for the crew. Improvements in fleet management has improved Air India's aircraft availability for service to 96.15%. The fleet utilisation of the narrow-body fleet is also constantly improving and ranged between 8.6 hours to 10 hours for the Airbus A320, A319 and A321 fleet.

Domestic competitors IndiGo, GoAir and SpiceJet have a fleet utilisation of more than 10 hours for their fleet.

The schedules are available on a web portal and SMS notifications are sent in advance to the crew which helps in minimising delays, the official said. Improved fleet utilisation is helping us reduce parking charges at airports as they spend more time in the air.

Fuel management initiatives have also yielded monetary fuel savings. Up to March 2012, the national carrier's efforts resulted in savings of 2,012 billion kg of fuel.

With such operational initiatives continuing and passenger numbers improving, Air India is confident of closing the year with R1,040 crore of Ebitda, therefore, meeting its target under the financial restructuring and turnaround plan.