BackAir India Express adopts de-risking strategy to reduce dependency on Gulf
Air India Express has engaged a consortium of consultants, KPMG and another firm to prepare a vision document till 2026 for preparing a long-term plan and improving the overall efficiency
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Mumbai: Air India Express, the low-fare airline of Air India, has signed a code sharing agreement with Air India Ltd and is open to similar agreements with other airlines, said company’s top official on the side-lines of an aviation summit in Mumbai.
It’s the first time that the airline will be getting into such an agreement. It’s also looking at tapping into other so-called “five-hour destinations" which includes Myanmar and South East Asia, as part of the strategy, said K Shyam Sundar CEO at Air India Express.
The low-fare airline has also engaged a consortium of consultants, KPMG and another firm to prepare a vision document till 2026 for preparing a long-term plan and improving the overall efficiency.
For the full year that ends in March 2017, Air India Express expects its revenue to be lower by Rs250 crore from what it had budgeted as the airline’s yields in the Gulf countries dropped by 15%-20% in the second half of the year, said Sundar. The airline had envisaged a revenue of Rs3550 crore for fiscal 2017. A little more than eight out of ten rupees earned by the airline comes from the Gulf region. “All this while, we haven’t looked beyond the Gulf consciously but we need to change that," said Sundar pointing out that the consortium of consultants will help the company devise a more efficient network strategy and a balanced market.
“We are today a 23- aircraft airline operating 600 flights a week. In the next four to five years we want to have 50-aircraft in our fleet," said Sundar. It will be adding two new aircraft—Boeing 737-800 NG in the second half of 2017. As per the turnaround plan of Air India, which has a chapter on Air India Express, Air India Express’s fleet size should go up to 36 aircrafts by 2017-18. Sundar said, it looks unlikely and the airline may have only 25 by 2017-18.
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