India’s loss-making national carrier has received a boost after its low-cost subsidiary, Air India Express, reported a full-year profit.
The result of INR3.62 billion (US$54.2 million) for the 2015-16 financial year marks the budget airline’s first ever full-year profit since its launch in 2005. Air India Express had posted a loss of INR620m in the previous financial year, but it surged into the black as a result of lower fuel prices and increased passenger traffic.
“This turnaround should be attributed to the sustained efforts of all the Air India Express employees and the tremendous trust placed on us by our valued passengers,” K Shyam Sundar, CEO of Air India Express, told the Economic Times.
“In purely business terms, the positive net outcome may be attributed to record levels of aircraft utilisation, PLF (passenger load factor) and yields achieved in the year. Of course, low ATF (aviation turbine fuel) rates also helped.”
The airline’s revenues jumped 11% to INR29.2bn, while costs were reduced by 4.7% to INR2.56bn.
Air India Express operates a fleet of 20 single-aisle aircraft on domestic and regional routes, including multiple destinations in the Gulf region.