Air India Express joins domestic carriers in posting profits, first in 11 years

Air India's low-cost international subsidiary Air India Express reported a net profit for the first time since it started operations in April 2005.

With this, the Air India subsidiary, which flies to international destinations, the company has joined other domestic players like Jet Airways, which turned profitable for the first time in eight years in FY16, and SpiceJet, which reported its highest ever fiscal profit in FY16.

Air India Express flies to 13 international destinations and four domestic locations, and has 19 B737-800 aircraft.

"It offers flights to major international destinations within a distance of around four hrs from different cities in India. Most of the flights are quick-turnaround flights with a ground time of around one-hour at the destinations," the company said.

How does the carrier stack up against different domestic players? Let's take a look:

Profit and Revenue

Air India Express posted a net profit of Rs 361.68 crore in FY16 compared to a loss of Rs 61 crore in the previous fiscal.

In a press release, the airline said, "As per the account placed and approved by airline's Board of Directors (on 31st August, 2016), the airline has made net profit of Rs 361.68 crore in the fiscal year 2015-16 against the loss of Rs 61 crore registered in the year 2014-15."

In FY16, the company reported a total revenue of Rs 2,917.96 crore as against Rs 2,622 crore earned in FY15.

In FY16, airlines like IndiGo, Jet Airways, and SpiceJet reported all reported profits, mainly on the back of lower fuel prices.

InterGlobe Aviation, owner of IndiGo, reported a net profit of Rs 1,990 crore for the year-ended March 31, 2016, due to a steep fall in jet fuel prices and a gain in market share. It posted a revenue of Rs 16,601 crore, a 16% jump. IndiGo is the largest domestic airline in terms of market share.

India's second largest airline in terms of market share, Jet Airways, also tuned profitable in FY16, reporting its first ever annual net profit after eight years in operation. On a consolidated basis, the company's annual profit was reported at Rs 1,211.65 crore as against a net loss of Rs 2,097.41 crore a year ago.

Another low-cost carrier, SpiceJet, reported its highest-ever annual profit of Rs 407 crore for the financial year-ended on March 31, as compared to a net loss of Rs 687 crore in the previous fiscal.
This is only about Rs 45 crore more than the net profit Air India Express posted in the same period.

Market share

Air India Express' market share figures are not shared in the data released by the Directorate General of Civil Aviation (DGCA). We contacted the airline for an update on the market share, but the email didnot garner a response till the time of publishing this article.

Amongst the domestic airlines, IndiGo has the highest market share in the Indian market. DGCA data for July showed that IndiGo continued to dominate the Indian aviation industry with 39.8% market share on a monthly basis.

On a yearly basis, DGCA said that IndiGo's market share by the end of FY16 was 37.4%.

Jet Airways' market share was remained unchanged at 16.3% in July. While in FY16, the company's market share was 17.6%, placing it at the second highest among the domestic airlines.

As for SpiceJet, in July, the company's market share fell to 12.7% from 18% in the same period last year. On an annualised basis, in FY16, SpiceJet came in third with 13% market share.

Passenger load factor and passengers carried

As per a report in The Economic Times, the fleet size of Air India Express remained unchanged at 17 aircraft from the previous fiscal. Factors like higher passenger load factor and better utilisation of its assets helped the company post positive financial results for the first time in 11 years.

"The year witnessed passenger load factor of 82.3% against 81.4% in the previous year while the average daily aircraft utilization rose to 11.3 hours from 10.8 hours. The year, the Airline carried 2.80 million passengers as against 2.62 million in the previous year," AI Express said.

As per the latest data available with DGCA, in July, SpiceJet had the highest passenger load factor at 92%. While Jet Airways' passenger loan factor was 83.8%, which was marginally more than IndiGo's 83.6%.

Having mentioned that, it's important to note that Air India Express' B737-800 aircraft has a capacity of 180 seats, which is lesser than most other airlines.

IndiGo's Airbus A320Neo can carry from 150 to upto 189 passengers in high-density configuation. Jet Airways' has both Boeings and Airbus' with certain aircraft like the Boeing 777-300ER with a seating capacity of over 300. SpiceJet's aircraft seating capacity goes up to 212 passengers on the Boeing 737-900 ER.

The fleet size of Air India Express is also puny compared to others – IndiGo has about 140 aircraft, according to planespotters.net; Jet Airways has 116 aircraft, according to the fleet information on its website, while SpiceJet has about 38 aircraft in its fleet.

Air India Express plans to add six aircraft in FY17, the airline said. "The plan will see the induction of six aircraft in the current fiscal, three of which have already joined the fleet in the 1st quarter. The induction of three more aircraft by the end of third quarter will take the Airline's fleet strength to 23 aircraft," CEO of Air India Express, K Shyam Sundar said.

ALSO READ: SpiceJet: The turnaround story

Cancellation, denied boarding, and delayed flight cases

Air India Express did not responded to an email sent to them seeking information about cancellation, delays, and denied boarding cases.

However, among the domestic airlines, Jet Airways registered highest cases of denied boarding in July, which affected 861 passengers. Jet Airways' 347 passengers were affected due to cancellations and 2,642 travellers due to delays that went beyond two hours.

While, SpiceJet reported no cases of denied boarding in July, at the same time, 1,090 passengers were affected due to flight cancellations and 3,750 travellers, due to delays beyond two hours.

As per DGCA data, on a monthly basis, IndiGo did not registered any cancellations and denied boarding cases. But 19,116 passengers were affected due to delays beyond two hours.