The national flag carrier Air-India has posted a marginal growth in net profit at Rs 96.39 crore (Rs 963.9 million) for the financial year ended March 31, 2005 against Rs 92.33 crore (Rs 923.3 million) in 2003-04.
While it has posted a 22.2 per cent increase in total revenue at Rs 7,630 crore (Rs 76.3 billion) during the year compared with Rs 6,246 crore (Rs 62.46 billion) to last year, total expenses shot up to Rs 7,565 crore (Rs 75.65 billion) from Rs 6,238 crore (Rs 62.38 billion). The A-I board has also declared a dividend of 10 per cent to the government after a gap of 10 years.
"Main factors that led to better profit include increase in the number of passengers, rise in capacity utilisation and curtailment of cost on other controllable expenses. The decrease in interest on financing arrangement has also helped the company to post better performance," company secretary S Venkat said.
"However, increase in fuel prices adversely affected the profitability of the airline to the extent of approximately Rs 643 crores (Rs 6.43 billion)," he said. Average fuel costs shot up from US Cents 114 per US Gallon in 2003-04 to US Cents 159 per US Gallon in 2004-05. He said the current prices are around 220 US Cents per US Gallon.
"But for this increase, the net profit for 2004-05 would have been in the region of Rs 450 crores (Rs 4.5 billion) after adjusting for fuel surcharge. The airline, in an effort to minimise the impact of rising fuel prices, is planning to hedge some of its international fuel uplifts shortly," he said.