The airline is planning to expand its domestic base and is also in the process of finalising its plans to launch its international operations by the end of the next year.
Air Asia India is reportedly likely to break-even or earn profits by the end of 2019. According to the a report in The Financial Express, the airline, which is a joint venture between Tata Sons and Air Asia, is planning to expand its domestic base and is also in the process of finalising its plans to launch its international operations by the end of the next year, in spite of seeing a huge impact on its bottom-line during January-March quarter due to increase in usage of fuel and staff cost.
While the airlines losses were reduced by 13.65 per cent during the first quarter of financial year 2017 due to forex gains, there was an increase of fuel cost by 26 per cent to Rs 111.89 crore. Even though the airlines made a total revenue of 47.25 per cent amounting to approximately Rs 282.10 crore, the cost of staff increased by 54.82 per cent amounting to approximately Rs 64.59 crore in the same quarter, the report says.
Speaking to Financial Express, CEO Air Asia, Amar Abrol, said that the airlines has enough funds to increase its domestic operations. “Financially we are headed in the right direction and confident of breaking even by 2019. We have trimmed our losses and increased our fleet size. The average utilisation of our aircraft are more than 13 hours which is quite good and load factor (PLF) is also close to 90%. Though fuel cost has increased our CASK is probably the lowest in the industry,” Abrol told FE.
Apart from increasing its range of offerings for corporate travellers, the no-frill carrier is also planning to make use of the four existing A320 aircraft by November this year and increase the size of its fleet to 20 aircraft by October-November next year, the report says. Abrol told the newspaper that the airlines has registered better yields than its competitors but now needs to expand the staff to make way for its expansion plans. “Yields have been under pressure and the second quarter is usually very lean but we have registered better yields than our competitors. We can’t control the fuel price but will have to increase staff because of expansion of our operation. The top-line has improved and we will continue to innovate our new products,” Abrol was quoted by the newspaper as saying.
Abrol said to meet its targets, the airlines is planning to consolidate its operations in ASEAN countries where there is a presence of its parent company Air Asia Berhad. “We will look east since our parent company is also there, hence it will be a natural fit for us. Air Asia is a big brand out there. In the next 3-6 months the plan for international operations will be finalised and subsequently to be presented in the board. We expect to start by the end of next year,” Abrol told Financial Express.