Date:07/11/2006 URL: http://www.thehindubusinessline.com/2006/11/07/stories/2006110702570700.htm

Back Indian profit may fall short of target

K. Giriprakash

Bangalore , Nov 6

Indian expects to fall short of its profit target of around Rs 100 crore this fiscal even as it has set in motion plans for a wholesale wage revision.

"We could end up with around Rs 75 crore of profit this fiscal largely because of increase in ATF prices, poor yields and repair of engines," Mr Vishwapati Trivedi, Chairman and Managing Director, told Business Line.

Mr Trivedi, who was in the city to launch a flight between Bangalore and Male, also said that the airline was in the process of making up for such setbacks during the course of the second half of the fiscal. The total turnover is expected to rise 7-10 per cent from Rs 6,600 crore last year.

Mr Trivedi said that the airline had set up a committee to study the wage revision. "We have called for submissions from the employees and the unions as it will be a negotiated wage revision." He added that even though the wage revision was last carried out nearly a decade ago, the airline has been revising the salaries through productivity-linked incentives (PLIs).

The airline expects to complete the wage revision process by the end of the fiscal. The merger of the airline with Air India will not affect the wage revision, he said. Mr Trivedi also said that the airline will call for bids for taking on lease at least six 70-seater regional jets for Alliance Air. "We plan to deploy them on feeder routes and to places with smaller airports." The bid process is expected to be initiated in 15 days. The airline is planning to turn Alliance Air into a low-cost no-frills airline in an attempt to turn it around. On the issue of merger of Indian and Air India, Mr Trivedi said: "As per the roadmap, it is expected to happen by the end of the fiscal. The details are being worked out by a committee."