Air India can be profitable with oil at $60: official

Air India, who is set to announce its first profit in nearly decade, will continue to make money even if oil rises to $60 a barrel, an airline board member said Thursday. The Indian government said in March that state-owned Air India would report a Rs8-crore ($1.25m) profit for the 12 months to March 31 compared to a Rs2,636.18-crore ($394m) loss in the previous year. It last made a profit in 2007-2008. Air India has been able to turnaround years of losses largely due to the collapse in the oil price that has slashed the airline’s operating costs, board member Pankaj Srivastava told Gulf News in Dublin at the International Air Transport Association (IATA) annual meet. But operating costs have increased for many airlines in the past four months with oil benchmark Brent crude rallying by 80% to $50 a barrel Friday. “It’s hardening again. So I expect it’s going to stabilise at $55/$60 … [and] with that kind of pricing we would still be profitable,” Srivastava said. The increase in the oil prices comes as carriers caution that fare margins are under pressure from currency fluctuations and a glut of seats. Air India is considering launching flights to Spanish cities Madrid or Barcelona, though it is likely to fly to Madrid and start the services in November, Srivastava said.<br/>