Air India (AI), India's national carrier, posted record sales of over RS11 billion from its Middle East operations during its last fiscal year.
Air India's Regional Director for the Middle East and Gulf, George Tharakan, said a 26 per cent sales surge in the fiscal year that ended on March 31 witnessed regional revenues that exceeded RS10 billion for the first time. In the previous year, sales turnover was slightly over RS9 billion, Khaleej Times reported. According to Tharakan, more than a third of his airline's sales are generated from the Gulf and Middle East, where many Indian expatriates reside.
"In a competitive market environment, this growth was achieved with a substantial increase in the number of passengers. Our strategy of getting more passengers to switch over to our services has paid off. Last year's performance even exceeded the revenue target we had set at RS10.8 billion," Tharakan announced.
AI carried 65,932 passengers in 1999-2000, while revenues from cargo and excess baggage also showed expansion at 27 per cent and 19 per cent respectively. "Given the record increment of 62,000 passengers achieved in 1998-99 amid increasing challenges posed by other airlines, some 11.5 per cent growth in passenger traffic last year is really significant," Tharakan said.
Dismissing claims that the increased sales came from increased fairs, he remarked, "Air India over the past two years demonstrates the carrier's consumer acceptable fare levels. Other factors contributing include improved on-time performance, upgraded level of service on flight and on ground and innovative marketing strategies such as value addition campaigns."
Despite increased sales, profits do not appear to be on the rise, according to the Hindustan Times. AI has a cumulative debt of RS 1,100 crore, and an accumulated working capital loan of RS 1,200 crore owed to banks. In the current fiscal 2000-2001, Air India has budgeted a loss of RS 75 crore.
For the Middle East and Gulf regions, AI boosted its passenger capacity to approximately 938,000 while passenger volume jumped by 29 per cent. Total growth in revenues during the period was 57.5 per cent, making the region the most profitable sector in Air India's operations.
Air France, KLM, Singapore Airlines, Emirates Airlines, and Swissair, are among the frontrunners to acquire a 26 percent stake in Air India. The Indian cabinet last week approved divestment of up to 26 percent in the national carrier to a foreign airline, Economic Times of India revealed. The acquisition is expected to help solve AI's fleet shortages. Currently, AI's fleet consists of 26 aircraft, of which three will soon be sold. The decision to sell the Airbus A300-B4 and Boeing B747-200 was taken to cut maintenance costs by reducing the range of aircraft in the AI stable.
- albawaba.com
© 2000 Mena Report (www.menareport.com)
