AirAsia India has for the first time in its short history recorded a positive operating profit or earnings before interest, tax, depreciation and amortisation (EBITDA) in the quarter gone by. The joint venture airline between AirAsia Berhad and Tata Sons reached the milestone in the June quarter of 2019.
The airline, which began its India operations in 2014, posted an EBITDA of Rs 112 crore compared to a negative EBITDA of Rs 48.4 crore in the same quarter a year ago.
AirAsia India posted a revenue of Rs 904 crore in the June quarter, a 39 percent increase year-on-year.
"The increase in revenue was mainly due to a 25 percent increase in number of passengers carried. Average fare and unit passenger revenue increased by eight percent and seven percent, respectively," the airline's parent said in a recent statement.
The strong earnings helped the airline narrow down its loses by 74 percent to Rs 15.1 crore in the June quarter. Its domestic market share increased by one percentage point to seven percent in these three months.
With @AirAsiaIndian having become EBITDA positive in Q1 FY20, and reached close to break-even at a net level, it is feasible to expect that the airline could break-even in FY20, especially if fuel prices remain low #IndianAviation
— CAPA India (@capa_india)
The airline was helped by Jet Airways suspending its operations in April. "The numbers were significantly aided by Jet's absence. All other airlines too have been helped," said a senior industry official.
Jet Airways is presently undergoing insolvency process and has received an expression of interests from three firms.Fleet expansionAt present, AirAsia India has a fleet of 22 aircraft and flies to 19 destinations in the country. "AirAsia India further expanded its capacity by 21 percent YoY, which was in line with the company’s strategy to grow its domestic market share," the parent said in a statement.
AirAsia India took delivery of its 21st aircraft during the quarter while approvals to commence international flights into the group’s destinations are pending, it added.
The Malaysian company said it overall wants to add 20 aircraft in 2019. Of these, nine will be for AirAsia India. The bulk of these aircraft will be the Airbus A320neo with a few Airbus A321neo, both boasting greater fuel efficiency.This is the fastest pace of fleet expansion by the airline in India. In 2018, AirAsia India had added five aircraft, apart from introducing two new destinations, and carried in excess of 6.8 million guests -- 54 percent more than it did in 2017.