Air India Express turns profitable, at last!

  • A decade after its take-off, the national low-cost carrier has earned profit on wings of cheap fuel and efficient fleet management

Air India Express (AIE) made a profit of Rs362 crore during the 2015-16 fiscal. This is for the first time that the budget airliner has recorded a profit since its launch in April 2005. Its loss during the previous fiscal was Rs62 crore.

AIE mostly caters to Indians travelling on the Arabian Gulf route.

The achievement of the national carrier is significant in the backdrop of private airlines—IndiGo, Spice Jet and Jet Airways—having an increasing presence in the Middle East.

Though competition has intensified on the lucrative route, AIE records a higher seat occupancy. It achieved a passenger load factor of 83 per cent. The airline earned a revenue of Rs2,917 crore in Fy 2015-16, an increase of 11.3 per cent over the previous fiscal year.

Saved on fuel

On account of the steep fall in the price of aviation turbine fuel—price fell by 28 per cent during the year—AIE saved 4.7 per cent in the overall cost.

At the same time, increase in operational efficiency added to the competitiveness of the airline. By carrying more people on a flight, its revenue went up by 11.3 per cent.

The airline earned more by operating extra flights without increasing its fleet strength. The aircraft utilisation of AIE was 11.3 hours per day, which is comparable with the best performance of its competitors. Internationally, a flying time of 12-13 hours is considered an optimum use of an aircraft.

The carrier operates 17 planes and will deploy six more in November. It operated 24 planes in 2013.

Worst time

The airline had a bad time in 2010. In that year, its Dubai-Mangalore Flight 812 skidded off the runway at Mangalore airport, broke and fell off a cliff, killing 159 passengers and crew. Only seven people survived. In the Fy2010-11, the losses peaked to Rs391 crore.

Spreading wings

Air India Express flies to 13 international destinations from 13 Indian cities, mostly from the southern states—Kerala, Tamil Nadu and Karnataka. Though its hub is in Kerala, AIE has flights from Delhi and Mumbai also to Middle East countries.

Owing to increased competition in the Gulf sector, the budget airliner has extended services to more Southeast Asian cities—Kuala Lumpur and Singapore.

The Kochi-based airliner is a property of Air India Charters Ltd, a wholly owned subsidiary of Air India Limited.

Being the owner of the brand name, Air India, too, benefits as it claims 11 per cent of the AIE revenue.

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Topics : #aviation | #Air India

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