Tuesday, 27 March 2012

Air India board okays direct import of jet fuel


National carrier Air India's board of directors has decided to import jet fuel directly. The board also approved the hedging of fuel up to 20 per cent of the total fuel uplifted abroad.
According to a statement issued after the board meeting, Air India would shortly appoint a service provider. It will source the supply as well as provide the necessary infrastructure for storage and distribution of the same for in-plane fuelling.
Meanwhile, the company claimed its financial and operating performance up to February had improved significantly. Passenger revenue in February went up to Rs 949 crore from Rs 718 crore in February 2011, an increase of 32.2 per cent, the airline said in a statement.
The total number of passengers who flew Air India also went up from 0.962 million in February 2011 to 1.091 million in February 2012, registering an increase of 13.4 per cent. Air India expects to end the year with higher than budgeted performance in revenues.
However, the escalating fuel cost is likely to add Rs 2,200 crore to its fuel bill, which is estimated to be around Rs 8,000 crore for 2011-12. Additional interest cost of Rs 1,500 crore also eroded its profitability, the airline said.
The board also approved the capital budget for 2012-13, which was in line with the annual plan outlay of the company involving a capital outlay of over Rs 400 crore on non-aircraft projects.
The bridge financing of the two 787 Dreamliner aircraft, which would be raised from Standard Chartered Bank, of $195 million, was also approved by the board. The bridge financing is expected to be closed soon.

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