Home Domestic Budget airline Air India Express may post first profit

Budget airline Air India Express may post first profit

Over a decade after it started flying to the Gulf countries to serve Indians working there, budget airline Air India Express is on course to post its first profit, aided by cheaper fuel, more efficient operations and a supportive government. However, the return of many expats due to a downturn following the oil price collapse in the Middle East—its key market— has also forced the airline to find new destinations. From its dark days in 2010 when its flight 812 overshot the runway and fell off a hillside in Mangalore killing 152 people on board, the budget airline has come a long way.

That year, its flights were only 69 per cent full, and it was operating 21 aircraft which carried nearly 2.14 million passengers, according to data from the Directorate General of Civil Aviation (DGCA) and the airline. In 2015, it had 17 planes, with 82 per cent flight occupancy and carried 2.58 million passengers. (Some of the aircraft were retired.) From a loss of Rs.391 crore in 2010-11, the year of the accident, Air India Express will report a profit of Rs.320 crore in 2015-16, its first profit since its founding in 2004, said K. Shyam Sundar, the airline’s CEO who took over in 2014.

He expects a revenue of Rs.2,850 crore this year, against Rs.1,779 crore in 2010-11. “It’s quite a remarkable story in the sense that the circumstances have also helped us,” said Sundar. “I am thinking I am bit of a lucky man.” Higher flight occupancy helped Air India Express, said Jitender Bhargava, former director at Air India. “The load factor increase is impressive and commendable.” “All said and done, if they have turned profitable, it’s a very welcome step.” When Sundar joined, Air India Express was heavily dependent on parent Air India for crew. Pilots did not want to relocate to Kochi in Kerala where the airline is based. This led to under-utilization of aircraft and delayed flights, according to Sundar.