Air India Express, the regional international subsidiary of beleaguered state-run carrier Air India, on Tuesday, said that it has reported net profit for the fourth consecutive year, even while its parent Air India Ltd is yet to report a net profit since its ill-fated merger with Indian Airlines nearly a decade ago.
The budget airline reported a net profit of ₹169 crore for the full year ending March 31, 2019, compared with ₹262 crore it reported in the same period of the previous year. The profits fell 35.5% on an annual basis.
Meanwhile, Air India Express’ revenues grew by 16.07 % during FY 19, going up from Rs. 3, 620 Crores in 2017-18 to Rs. 4,202 Crores in 2018-19.
The strong financial performance of Air India Express can be attributed to a fall in the crude price during the last year. During the last 12 months, while the Rupee has weakened 0.09% against the dollar, crude prices have fallen 13.3%. The Rupee closed at ₹68.87 against the Dollar on Tuesday while the Crude price stood at $64.38 a barrel.
“The net profit earned in the last fiscal is particularly significant as the aviation sector has had to face many challenges, including high input costs. The unit cost incurred on fuel alone, increased by around 35 % during this period," Air India Express’s chief executive officer K Shyam Sundar said in a statement.
“The impact of this on profitability was huge, as more than 40 % of the airline’s operating cost were incurred on fuel. Despite this we were able to drive-in profit by greater utilization of our assets and resources, like aircraft, manpower and materials," Shyam Sundar added.
Air India Express connects non-metro cities in India to neighbouring international destinations, especially in the Gulf region.
As part of Air India’s original turnaround plan, prepared by SBI Capital Markets in 2011, Air India Express was expected to have 36 planes by 2016-17. However, this fleet expansion is yet to happen.
The number of passengers carried by the Air India Express increased by 12 %, to 4.36 million during FY 19, as compared to 3.89 million passengers the airline carried in FY 18.
The airline’s average daily aircraft utilization rose to 13.3 hours during FY 19, from the 12.7 hours in the previous year while its average passenger load factor during the fiscal stood at 79.6%, up 4% from the previous year.
“The fiscal also saw Air India Express inducting two more aircraft on dry lease, which joined the fleet in September and October 2018 respectively. With the induction of these two aircraft, Air India Express expanded its network to three new Indian cities - Bengaluru, Kannur and Surat," the airline said in a statement.
Air India Express has a fleet of 25 Boeing 737-800 NG aircraft, and operates from 13 international and 20 Indian destinations.