Tuesday, May 26, 2015

Crores Are eating away Air India's Lunch

The long awaited and long deployed 787 has not turned Air India away from loss even though the fuel metric has turned most operations in a positive fuel cost direction on its international routes. The 787 has lived up to its promise for Air India, making gains in the fuel in its cost category for each international flight. The disturbing Air India financial news remains with the operators end of mismanagement. The 787 delivered, but the company that flies it cannot get its arms around its own profitability scheme.

The  above chart suggests over $90 million a month is lost while operating and applying its variable costs. A chief indicator of that loss is from not receiving enough revenue stream gained from appropriate ticket prices and collecting  greater loss from its operational inefficiencies. Air India  picks up too much of the the work and supply tab every time one of its airplane flies. Anybody for fixed Costs?

The numbers above come from  Hindustan Times. Trade values for currency are from today's calculation converting Crore to US dollars.