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Last Updated : Jan 17, 2020 06:10 PM IST | Source: Moneycontrol.com

Air India Express continues to fly high on profitability

The low cost unit of Air India, which is on course to report fifth straight year of profitability, excels on almost all parameters, compared to the rest of the airlines

Jet Airways was forced to suspend operations due to paucity of funds. IndiGo and SpiceJet reported record losses in the second quarter. And Air India is struggling to stay afloat, desperate to get a new owner through the government's disinvestment initiative.

On the other hand, Air India Express is on course to post a net profit for the fifth year in a row. The Air India subsidiary had first turned profitable in the 2016 financial year. Since then, it has managed to strike a balance in expanding its operations, and keep its costs in check.

A report by The New Indian Express, quoting sources at the airline, said that Air India Express is on course to report a profit of Rs 500 crore in the 2019-2020 fiscal. This will be a jump from the Rs 164 crore profit it earned a year ago. In fact, it will be its highest profit in its history.

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How is it that the budget airline is set to achieve record profitability, when bigger names in the industry are struggling to keep flying?

The airline

Air India Express was founded in 2005 as  a low-cost arm of Air India to connect non-metro cities with destinations, mostly in the Middle East and South East Asia.

The airline carried over 4 million passengers a year, with a fleet of 25 aircraft. "Air India Express enjoys 6 percent market share in India - International travel market, and 13.3 percent market share in the India - Gulf travel market," it says on its website.

The airline, which is headquartered in Kochi, is led by CEO K Shyam Sundar.

The mantra

Key to the success of Air India Express lies in its performance on some key parameters.

Its aircraft on an average fly 14 hours a day, which is higher than most of its peers. Most airlines average around 11 hours.

While its load factor of 85 percent is comparable to its larger peers, Air India Express comes trumps in terms of schedule reliability. At 100 percent, it has an enviable record of not having cancelled any scheduled flights, unless in case of external exigencies.

Interestingly, Air India Express also scores high on employee-to-aircraft ratio, something that ails its parents Air India. While the low -cost carrier's ratio is 60, Air India has more than 100 employees for each of its aircraft. Most of the other airlines have similar ratios.
First Published on Jan 17, 2020 03:11 pm
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