Air India Express overcome headwinds to declare profit for 4th consecutive year

With a passenger load factor of 80 per cent, revenues go up by 16 per cent

July 30, 2019 By Vishal Thapar Photo(s): By SP Guide Pubns
CASH COW: The winsome performance of Air India Express stands in stark contrast to its parent airline, Air India, which is reeling under the burden of heavy debts and low profitability despite high passenger loads

Air India Express, the low cost arm of Air India, on July 30 declared a net profit of 169 Crore on revenues of 4,202 Crore for the financial year 2018-19.

This is the fourth year in a row that this Air India subsidiary has declared profit. With a fleet of 25 Boeing 737-800 NG aircraft, Air India Express operates from 13 international and 20 Indian destinations.

Despite severe market headwinds, the number of passengers flown by Air India Express grew 12 per cent to 4.36 Million and its revenues grew 16.07 per cent from 3,620 Crore in 2017-18 to 4,202 Crore. International carriage alone grew by 10.5 per cent, according to a statement issued by the airline.

The low cost carrier demonstrated robust fundamentals with a passenger load factor of 79.6 per cent and aircraft utilisation of 13.3 hours per aircraft per day leading to an increase in capacity. The utilisation figure for the previous year was 12.7 hours.

"The net profit earned in the last fiscal is particularly significant as the aviation sector has had to face many challenges, including high input costs. The unit cost incurred on fuel alone, increased by around 35 per cent during this period. The impact of this on profitability was huge, as more than 40 per cent of the Airline's operating cost were incurred on fuel. Despite this we were able to drive-in profit by greater utilization of our assets and resources, like aircraft, manpower and materials. Through concerted cost measures, the airline was able to contain the unit cost incurred on expenses other than fuel to be at the same level as in FY 18," CEO, Air India Express CEO K Shyam Sundar said.

In 2018-19, Air India Express inducted two more aircraft on dry lease in September and October 2018 respectively expanded its network to three new Indian cities - Bengaluru, Kannur and Surat.

The Airline has carried out a major refurbishment of its cabin interiors, involving the change of seats, carpets and curtains on 17 of its aircraft, during the year 2018-19. "This refurbishment has significantly improved the cabin ambience and passenger comfort and convenience," the statement added.

FLYING HIGH: ACHIEVEMENTS IN 2018-19:

  • Net Profit of 169 Crores
  • Total Revenue increased by 16.07 %
  • Passenger Load Factor 79.6 % (4 % increase)
  • Aircraft utilization 13.3 hours per Aircraft per day.
  • Number of Passengers carried 4.36 million - increase of 12 %