Air India posts healthy growth revenue

"The yields on domestic sector had significant improvement of 38.5 per cent in March vis-a-vis last year. The seat factor during this period also increased nearly 7.9 per cent. Consequently, the airline posted a healthy growth in revenue of 46.1 per cent," the sources told PTI.

On international routes too, the airline put up a good performance, clocking a nearly 33 per cent growth in passenger revenue. The higher growth came on the back of an eight per cent jump in load factor and higher yields at 28 per cent. "For the quarter ending March this year, the passenger revenue showed an improvement of 36.1 per cent, besides a 15.7 and 23 per cent rise in seat factor and yields respectively over the same period last year," the sources said.

On a cumulative basis, the revenue for fiscal 2012 posted a growth of 13 per cent with load factor of 5.7 per cent, they said, adding that the yields were up nearly 10 per cent.

The financial restructuring plan would provide relief to Air India from its debt servicing obligations on working capital loans in the form of a substantial reduction in interest outlays, while giving it the necessary time to improve its operational efficiency.

Air India`s current outgo on interest payment to the banks is Rs 2,400 crore, which is expected to come down drastically due to the financial restructuring plan (FRP). The airline has recently invited application from banks and international financial institutions to raise USD one billion for working capital through the external commercial borrowings route.

The move would enable the debt-ridden carrier to bring down its interest servicing cost of working capital to almost half as the difference between the rupee borrowings and international borrowings is to the extent of 5-6 per cent.

Under the FRP, Air India had signed four agreements with the SBI-led 19 bank consortium on March 31 -- the master restructuring agreement, the working capital facility agreement, the appointment of facility agent agreement and the appointment of trustee agreement.

The FRP also includes conversion of about Rs 11,000 crore of working capital loans into long-term debts, which would lead to a saving of about Rs 1,000 crore this fiscal itself. Air India has outstanding loans and dues worth Rs 67,520 crore.

The national carrier would issue government-guaranteed non-convertible debentures (NCDs) worth Rs 7,400 crore to its lenders, like financial institutions, banks, LIC and EPFO. The NCDs would be used to repay part of the airline`s close to Rs 21,200 crore working capital loans.