Kochi: Air India Express, the low-cost arm of Air India, posted a lower net profit for the year ended 2016-17. The airline, which is headquartered in Kochi, recorded a net profit of Rs 296.7 crore, 17.97% lower than the net profit it posted in the previous year. For the financial year ended 2016-15, Air India Express had earned a net profit of Rs 361.68 crore. The airline has been registering operating profit for the last four years, and for the first time earned a net profit in 2015-16.
“The net profit earned in 2016-17 is particularly significant as the competition from Indian private carriers increased considerably during the year. Added to that was the sluggishness of Gulf economies, where 90% of our capacities are deployed and with the large increase in capacity offered by the airline, we had to strive harder to achieve this success. Obviously, it would not have been possible without the trust placed in us by our valued customers in choosing us over other options,” said Air India Express CEO K. Shyam Sundar.
Despite the adverse market conditions, Air India Express increased its revenue by 14% to Rs 3,335 crore. The company claimed that prudent commercial and management interventions including better utilisation of its assets gave rise to reduction of about 5-7% in unit costs contributing to the positive financial outcome. Average daily aircraft utilisation rose to 12.2 hours from 11.3 hours last year.
The capacity offered by the airline went up by 33% even as the airline’s fleet size progressively increased through the year from 17 to 23 aircraft. The year also saw Air India Express expanding to highly competitive markets out of Delhi and Mumbai. It also launched services from Kolkata and Chandigarh. The airline introduced operations on 11 new routes and increased the frequency/capacity on 13 sectors during the period. Consequently, the number of passengers carried increased by 22% to 3.42 million from 2.8 million in 2015-16.
