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AirIndia
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News On Indian

Tue Dec 27, 2005 2:02 pm

Riding the low fare-fuelled boom in air travel market, the state-owned Indian Airlines (Indian) cruised through the 2004-05 fiscal with a 48.5% jump in net profit to its highest-ever level in nearly two decades.

link: http://economictimes.indiatimes.com/articleshow/1347246.cms

officials said the airline has pushed its plans to operate flights to London to the summer of 2006 because of non-availability of wide-bodied planes. The airline is now issuing tenders for the third time seeking 12 wide-bodied planes.

Now an article in HT says, that the widebodies will be a mix of A330s, A340s and 767s.... any news on this...
 
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HAWK21M
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RE: News On Indian

Tue Dec 27, 2005 6:41 pm

Quoting AirIndia (Thread starter):
Riding the low fare-fuelled boom in air travel market, the state-owned Indian Airlines (Indian) cruised through the 2004-05 fiscal with a 48.5% jump in net profit to its highest-ever level in nearly two decades

Guru.....Would the Kingfisher Agreement be added to the Profits  Smile
regds
MEL
I may not win often, but I damn well never lose!!! ;)
 
cricket
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RE: News On Indian

Tue Dec 27, 2005 7:10 pm

Lets make it easy...

PRESS RELEASE




Indian registers record net profit of Rs. 65.61 cr. for 2004-05


Indian Airlines Ltd has recorded a net profit of Rs.65.61 crore for the year 2004-05. The net profit, for the second successive year, surpasses last year's net profit of Rs.44.17 crore by 48.5 %. The Annual Accounts of the company were approved by the Board of Directors at its last meeting.

The record profit of Rs.65.61 crore has been achieved in the face of rising domestic ATF prices during the year. Though the price of ATF increased by nearly 33% in 2004-05 as compared to the earlier year, the increase in traffic and increase in total revenue from Rs.4677.50 crore in 2003-04 to Rs.5362.57 crore in 2004-05 has been the major contributor to the increased profit. Also contributing to the net profit were the strict cost control measures adopted during the year on account of which a saving of Rs.76.59 crore was achieved.

Indian Airlines Ltd.
New Delhi

26th December 2005

-----

We'll see the widebody when it finally comes - but a 767-300ER would be most likely right now. They want Airbus A330's though, but the lease market for A330's is very tight.
A300B2/B4/6R, A313, A319/320/321, A333, A343, A388, 737-2/3/4/7/8/9, 747-3/4, 772/2E/2L/3, E170/190, F70, CR2/7, 146-3,
 
Nimish
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RE: News On Indian

Tue Dec 27, 2005 8:22 pm

This is a great paradox to me - how can you reduce fares to 30% -50% of your earlier fares, and still make a greater profit than last year!!! I guess the Kingfisher maintenance outsourcing must have a huge portion to do with this - since I'm guessing no additional hires needed to be made.
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cricket
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RE: News On Indian

Tue Dec 27, 2005 9:26 pm

Lots of little reasons actually - IC makes a lot of money from high-yield J-class seats, the charter business and frieght. The Kingfisher deal is profitable, not so much from a maint standpoint but because it cross-subsidises the Cat II and Cat III routes.
A300B2/B4/6R, A313, A319/320/321, A333, A343, A388, 737-2/3/4/7/8/9, 747-3/4, 772/2E/2L/3, E170/190, F70, CR2/7, 146-3,
 
Nimish
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RE: News On Indian

Tue Dec 27, 2005 10:06 pm

Quoting Cricket (Reply 4):
IC makes a lot of money from high-yield J-class seats, the charter business and frieght

Wasn't all of this always the case? What changed this year that they're able to make more profits despite much lower air fares? Have their loads gone up tremendously? Have they really tightened ship and gone through a lot of cost cutting? Or were they plain sloppy/inefficient/bloated before this year?

I would love to be able to make more sense of this situation. That being said - I'm really glad that IC has managed to make a profit, despite the skyhigh fuel prices etc. This might also mean good news for their IPO (if there's one coming up)!
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aseem
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RE: News On Indian

Wed Dec 28, 2005 12:17 am

Quoting Nimish (Reply 5):

very good analysis of the situation. You should have been in my respected list long ago.
rgds
VT-ASJ
ala re ala, VT-ALA ala
 
LAXDESI
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RE: News On Indian

Wed Dec 28, 2005 1:38 am

Quoting Cricket (Reply 2):
Also contributing to the net profit were the strict cost control measures adopted during the year on account of which a saving of Rs.76.59 crore was achieved.

Savings of Rs 76 crores on total costs of about Rs 3,500 crores(excluding fuel) is about 2%. I am sure there is more fat that remains.

Quoting Cricket (Reply 2):
Indian Airlines Ltd has recorded a net profit of Rs.65.61 crore for the year 2004-05. The net profit, for the second successive year, surpasses last year's net profit of Rs.44.17 crore by 48.5 %. The Annual Accounts of the company were approved by the Board of Directors at its last meeting.

Indian's profit margin works out to about 1.2%. Compare this to Jet's results of about Rs 331 crores net profit on revenue of Rs 4,338 crores, a 9% profit margin. Indian has a long way to go.
 
Gr8Circle
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RE: News On Indian

Wed Dec 28, 2005 1:42 am

Quoting LAXDESI (Reply 7):
Indian's profit margin works out to about 1.2%. Compare this to Jet's results of about Rs 331 crores net profit on revenue of Rs 4,338 crores, a 9% profit margin. Indian has a long way to go.

Well, I guess they are just relieved that the color of the ink has changed from red to black after a long time..... wink ...so are we....
 
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HAWK21M
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RE: News On Indian

Wed Dec 28, 2005 3:57 pm

Its rumoured that the Kingfisher Deal may not be renewed next year.Hopefully the Profits hold.
regds
MEL
I may not win often, but I damn well never lose!!! ;)
 
Nimish
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RE: News On Indian

Wed Dec 28, 2005 4:10 pm

Quoting HAWK21M (Reply 9):
Its rumoured that the Kingfisher Deal may not be renewed next year

Is that on account of IT wanted to set up it's own infrastructure? Or is IC acting pricey?
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wedgetail737
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RE: News On Indian

Wed Dec 28, 2005 4:12 pm

Where is Indian getting the 767-300ER? I thought the availability of these airplanes were pretty low.
 
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HAWK21M
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RE: News On Indian

Wed Dec 28, 2005 4:47 pm

Quoting Nimish (Reply 10):
Quoting HAWK21M (Reply 9):
Its rumoured that the Kingfisher Deal may not be renewed next year

Is that on account of IT wanted to set up it's own infrastructure? Or is IC acting pricey

The Former.

Quoting Wedgetail737 (Reply 11):
Where is Indian getting the 767-300ER

No news on those,But what happened to the S2 B763.
regds
MEL
I may not win often, but I damn well never lose!!! ;)
 
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AirIndia
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RE: News On Indian

Wed Dec 28, 2005 5:40 pm

Quoting HAWK21M (Reply 1):
Kingfisher Agreement be added to the Profits

Any idea on the deal size.... a ratio against revenues/profits would tell the impact

Quoting Nimish (Reply 10):
T wanted to set up it's own infrastructure

Wasn't there news that IT would form a company and along with itself provide ground services to other intl LCCs (like Air arabia, Tiger etc) trying to enter the Indian markets.... I think even DN is porposing something on these lines...
 
Nimish
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RE: News On Indian

Wed Dec 28, 2005 7:56 pm

Quoting Aseem (Reply 6):
very good analysis of the situation. You should have been in my respected list long ago.

Thanks!  embarrassed 

Quoting AirIndia (Reply 13):
Wasn't there news that IT would form a company and along with itself provide ground services to other intl LCCs (like Air arabia, Tiger etc) trying to enter the Indian markets.... I think even DN is porposing something on these lines...

That would be quite something. But then why target only LCCs entering the Indian markets?

Quoting AirIndia (Reply 13):
Any idea on the deal size.... a ratio against revenues/profits would tell the impact

From http://www.financialexpress.com/fe_full_story.php?content_id=91969
Indian Airlines recently bagged a Rs 120 crore contract from Kingfisher Airlines for maintenance work and for flying on non-viable routes.

So if their total profit was Rs 65.61 Cr, and they got about Rs 70-80 Cr from the deal last year (assuming the deal ran from May'05 - Apr'06?). Are costs for consumables passed back to IT, or are they absorbed as a part of this 120Crore deal? If they are passed back to IT, then I'd say the maintenance contract is the profit earned by IC!
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cricket
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RE: News On Indian

Wed Dec 28, 2005 8:39 pm

Quoting Nimish (Reply 14):
That would be quite something. But then why target only LCCs entering the Indian markets?

Let them get a full-fledged MD first and then lets see what happens.
Interestingly, both the BSE and NSE have a clause that companies listing on these exchanges have to show profits for three years consecutively before they list, so maybe there was a compulsion for IC to declare a profit. But as you pointed out, IC had pathetic margins but given the huge fixed costs of the airline, plus the non-profitable routes it flies, any profit is better than nothing.
In fact, if you go through IC's annual report you will notice that it is owed some Rs 250 crore by various PSU's and government agencies for over ten years.
A300B2/B4/6R, A313, A319/320/321, A333, A343, A388, 737-2/3/4/7/8/9, 747-3/4, 772/2E/2L/3, E170/190, F70, CR2/7, 146-3,
 
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AirIndia
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RE: News On Indian

Wed Dec 28, 2005 8:47 pm

Quoting Cricket (Reply 15):
Rs 250 crore by various PSU's and government agencies for over ten years.

Bad debts non-recoverable..... I hope they dont feature in the assets part of the balance sheet.....
 
cricket
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RE: News On Indian

Wed Dec 28, 2005 8:54 pm

Quoting AirIndia (Reply 16):
Bad debts non-recoverable

They aren't classified as Bad debts, even though that is what they are for all intents and purposes.
In fact they are part of the balance sheet - I would guess if all the PSU's starting paying other back, the economy would go beserk!
A300B2/B4/6R, A313, A319/320/321, A333, A343, A388, 737-2/3/4/7/8/9, 747-3/4, 772/2E/2L/3, E170/190, F70, CR2/7, 146-3,
 
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AirIndia
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RE: News On Indian

Thu Dec 29, 2005 1:46 pm

Quoting Cricket (Reply 17):
the economy would go beserk!

See thats one way to look at it. The other way would be to go ahead with consolidations. Why keep IOC BPCL HPCL as separate entities (They owe each other large sums of money) but merge them into one!! (The advantages here are that there is a consoloidated marketing budget which is far less as there is limited competition. The gains here can be used to pay off the debts to other entities.

Kingfisher had additional savings as after SW acquisition their marketing budget fell drastically due to lack of competition.
 
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HAWK21M
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RE: News On Indian

Thu Dec 29, 2005 4:48 pm

Quoting AirIndia (Reply 13):
Any idea on the deal size

Wasn't it 100 crores.
regds
MEL
I may not win often, but I damn well never lose!!! ;)
 
cricket
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RE: News On Indian

Thu Dec 29, 2005 9:38 pm

Quoting AirIndia (Reply 18):
there is limited competition

Not with Reliance coming in! Have you seen the dramatic changes across NH8 in Gujarat with the Reliance Highway Plazas!
UB's savings on marketing were minimal after the SW acqusition - because booze companies can't market too much anyway. Imagine now UB has THREE brands of packaged drinking water - Kingfisher, RC and McDowell's. I wonder if you can find any of them anywhere.
A300B2/B4/6R, A313, A319/320/321, A333, A343, A388, 737-2/3/4/7/8/9, 747-3/4, 772/2E/2L/3, E170/190, F70, CR2/7, 146-3,

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