Air India Express mulls domestic operations

Air India Express (AIE), the no-frills brand of Air India, is exploring a foray into the domestic market.

AIE presently serves migrant labour and business traffic between India and West Asia. Its main bases are in Kerala and it is preparing for expansion. That could include flights on domestic routes. While the immediate focus is on growing its business in established markets, it is hiring a consultant to prepare a network plan and evaluate all potential routes, domestic and international, which could be served profitably.

“The consultant’s report is expected in three to six months,” said chief executive officer K Shyamsundar.

Currently, AIE has 21 Boeing-737 planes. It will add four aircraft by December 2017, including two this year. Shyamsundar said the new aircraft would be used to expand services on the Gulf routes, especially Kozhikode-Saudi Arabia and Lucknow-Saudi Arabia. Also, by end-December, it will begin plying on the Kolkata-Singapore and Delhi-Dhaka routes. The airline is also evaluating whether to expand services to Southeast Asia, where it only connects Singapore and Kuala Lumpur at present. A Delhi-Teheran service is also under consideration. AIE expects its capacity and operating revenue to increase 25 per cent in 2016-17. The net profit was Rs 362 crore in FY16, its first annual profit since launch of operations a decade earlier. In FY15, it made a loss of Rs 61 crore.

Profit was aided by the decline in jet fuel cost and increase in revenue. “Our passenger revenue grew by Rs 300 crore to Rs 2,917 crore, the load factor was up one percentage point to 82.3 per cent and we increased our fleet utilisation,” said Shyamsundar.

Air India