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Indian targets 50% growth

Unperturbed by the competition from private airlines, Indian (Airlines) is expecting to register an ambitious growth of over 50% in profit.

india Updated: May 01, 2006 02:09 IST

Unperturbed by the competition from private airlines, Indian (Airlines) is expecting to register an ambitious growth of over 50% in profit in the current fiscal ending March 2007.

In 2005-06, the net profit is estimated at around Rs70 crore, which will cross Rs100 crore figure in the next current fiscal, said highly placed sources. “These assumptions are based on the fact that the company will remain standalone. In case the merger of two public sector airlines is being completed in the next three months then its contribution in the overall business and profitability would be much more,” they added.

Once the merger will be completed, the domestic and overseas operations will be under two separate divisions. So that it can leverage synergies of each other. The revenues of the company are expected to jump 12.5 per cent in FY'07 to Rs7,000 crore from Rs6,048 crore in FY'06.

To augment its fleet, Indian will take two A319 and one A320 aircraft on lease, which will be delivered in the coming weeks.

In November, the company is also expecting to get delivery of the first of the 43 planes it has placed orders for with Airbus. Of the 70 planes that Indian has, 20 are on lease.

The growth expected in 2006-07 will come in the face of stiff competition from low cost carriers, private players having a younger fleet, commencement of international operations by private carriers and increasing prices of fuel, sources said.

Market factors have led to the gradual erosion of Indian's share. In 2005-06, its market share was down to 32.8%from 41.7% in 2004-05. In 2005-06, the expendiure of the company on aviation turbine fuel grew to Rs2,300 crore from Rs 1,750 crore in 2004-05. In 2006-07, the expenditure on fuel is expected to be Rs2,440 crore.

In this fiscal, Indian is also targeting growth of 16%in the revenue passengers to 9.2 million and an increase in seat factor by three per cent to 69.

First Published: May 01, 2006 02:09 IST