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  1. After Air Asia India logs Rs 24.4 cr loss, airliner says expects top hit profit once foreign operations start in 2018

After Air Asia India logs Rs 24.4 cr loss, airliner says expects top hit profit once foreign operations start in 2018

Low cost carrier Air Asia India – a joint venture between Tata Sons and Air Asia Berhad – has reported an increase in its net losses by 19.3% year on year to Rs 24.4 crore for the quarter ended June 30, on the back of significant increase in fuel cost, aircraft lease rentals and staff cost.

By: | Published: September 1, 2017 4:49 AM
Air Asia India, Tata Sons, Air Asia Berhad, Aircraft lease Low cost carrier Air Asia India – a joint venture between Tata Sons and Air Asia Berhad – has reported an increase in its net losses by 19.3% year on year to Rs 24.4 crore for the quarter ended June 30, on the back of significant increase in fuel cost, aircraft lease rentals and staff cost. (Image: IE)

Low cost carrier Air Asia India – a joint venture between Tata Sons and Air Asia Berhad – has reported an increase in its net losses by 19.3% year on year to Rs 24.4 crore for the quarter ended June 30, on the back of significant increase in fuel cost, aircraft lease rentals and staff cost. However, the airline reported a record increase in revenues and capacity addition during the quarter. The airline follows the calender year as its financial year.
The revenues during the quarter saw an increase of 84% y-o-y to Rs 348.18 crore as a result of 89% y-o-y increase in passengers carried. Total passengers carried during the quarter stood at 1,005.34 million. The April-June quarter is regarded as a profitable one for airlines because of the summer holiday season. At an operating level the EBITDAR (earnings before interest, tax, depreciation, amortisation and rentals) also increased by 264% y-o-y to Rs 31.02 crore.

Apart from increase in the topline and addition in capacity the bottom-line of the airline suffered due to substantial increase in overall expenses including finance cost. The fuel cost – almost 40% of the total operating cost – increased by 88.9% y-o-y to Rs 144.6 crore while staff cost increased by 122% y-o-y to Rs 68.45 crore. Aircraft lease rentals – another important component of airline’s input cost – increased by a whopping 118% y-o-y to Rs 53.52 crore. “Our associate airline in India has grown spectacularly, hitting over one million passengers carried in a quarter after growing capacity 83% year-on-year. We expect AirAsia India to begin to show a sizable profit once international operations take off in end-2018,” said Tony Fernandes, CEO, Air Asia, Berhad.

Currently the airline has a fleet of 11 aircraft which it plans to increase to 14 by the end of the current year. During the quarter the available seat kilometre (ASK) or capacity added during the quarter increased by 55% y-o-y to 1,184 million compared to 762 million in the corresponding period. Average fare during the quarter also increased by 2% y-o-y to Rs 3,214. Ancillary revenue per passenger decreased by 13% y-o-y to Rs 361. The airline has also improved its load factor to 90% in the second quarter compared to 87% in the year ago period. The airline operated 83% more flights during the quarter to 6,222 flights. Air Asia is expected to start its international operations next year after it expands it fleet to 20 aircraft. According to Amar Abrol, CEO, Air Asia India, the low cost carrier is expected to start its international operations by flying to the Asean countries where its parent company Air Asia Berhad has a large presence.

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