Air India Express is expected to report an operating profit in the second half of the current fiscal year, its first since the airline was bought by the Tata Group in 2022, according to highlights of a town hall event seen by Reuters.
The operating profit forecast for the second half ending in March was presented recently by Air India Express executives, Reuters reported, citing the town hall highlights.
The forecast could offer some respite to the Air India Group at a time when the full-service carrier Air India is facing a financial hit from an airspace ban imposed on Indian airlines by Pakistan, the report said.
Capacity growth and market share gains
The operating profit expectation is being driven by an increase in capacity and higher market share, Reuters reported.
Air India Express, which operates more than 100 Boeing and Airbus narrowbody aircraft, is targeting a doubling of capacity over the next four to five years, Reuters said, citing comments made by the airline’s managing director in October. Last month, the airline said it would add 30 new Boeing 737 MAX jets to its fleet, the report added.
$70 million aircraft refurbishment plan
Air India Express is also investing more than $70 million in refurbishing its aircraft, Reuters reported, citing the same town hall highlights. An Air India Express spokesperson did not immediately respond to Reuters’ request for comment, the report said.
Turnaround under scrutiny
Air India Express and its full-service parent are being closely scrutinised by analysts and government officials for progress in their turnaround, Reuters reported.
Air India is in the middle of a multi-billion-dollar restructuring after years of decay under government ownership, though its efforts have been constrained by jet delivery delays from planemakers, according to Reuters. The carrier’s losses have also weighed on Singapore Airlines’ financial results, Reuters reported, noting that the airline owns a 25% stake in Air India.