AIR INDIA REAL TIME

Air India Real Time



Table of Contents

Introduction2

Airline Industry of India2

Air India International3

History of Air India5

Joint Venture with Virgin Atlantic6

Purchase of Airplanes8

Financial Situation9

Financial Analysis of Air India12

Ratio Analysis12

Liquidity Ratios12

Efficiency Ratios14

Profitability Ratios15

Gearing Ratios16

Vertical Analysis19

Horizontal Analysis22

Recommendations22

Conclusion23

Air India Real Time

Introduction

Air India is a multifaceted aviation company with in-house infrastructure for maintenance repair and overhauls (MRO) services; ground handling services; and cargo operations. The company offers its services with a network of 52 destinations across the US, Europe, Canada, Far East and South-East Asia, and the Gulf. Air India is owned by National Aviation Company of India (NACIL). The company primarily operates in India, where it is headquartered in Mumbai. The company operating profit was INR 34,720 million (approximately $732.9 million) in the fiscal year ended March 2010, a decrease of 38.8% compared to 2009. Its net profit was INR 55,510 million (approximately $1,171.8 million) in fiscal 2010, a decrease of 22.8% compared to 2009. Air India is facing a tight financial situation and is in talks with lenders to restructure its debt of Rs 40,000 crore (Air India, 2011). The lenders have agreed to reduce interest rates on the part of the debt that is linked to overseas borrowings. The future of the remaining debt is still uncertain, especially because lenders are seeking a conversion of their debt into equity or equity like instruments. Ideally, this should be at par, said a bank chief who is directly involved in the debt restructuring. This is perhaps the first time that the national carrier has defaulted on its payments to banks. Sources said the airline had approached banks for more loans, but they have declined to help because of the airline's poor financial health.

Airline Industry of India

Fastest means of transport is Air Transport. There are several favorable circumstances for the development of Air Transport in India. Credit goes to India for inaugurating the first Air Service Asia in 1914 by Post and Telegraph Department by carrying mail from Allahabad to Naini across the Ganga River. However, the real progress was made during World War II. In 1947, we had 27 airways companies in India and these covered a distance of about 22 crore kilometers on their scheduled flights and carried about 3 lakh passengers (Air India, 2011). Now they cover a distance of about 10 crore kilometers and carry more than 72 lakh passengers per year.

The number of airports increased to 91 by 1990-91. It includes 5 international airports at Mumbai, Kolkata, Chennai, Delhi and Trivandrum. International Airport Authority of India was established in 1972 in the public sector. National Airport Authority of India was formed in June 1986. Vayudoot and Pa wan Hans are the two airlines added to civil aviation recently. Previously Air India International for international services and Indian Airlines for domestic services were established in 1953. Vayudoot operates to inaccessible remote stations not touched by Indian Airlines. Pawan Hans provides helicopter services to distant places. Indira Gandhi Rastriya Urban Academy (GRUA) has been set up to train commercial ...