Air India Express incurs net loss for the first time in seven years

Air India Express, which operates flights mainly between India and the Gulf countries, posted a net loss for the first time in seven years, because of the Covid-19 pandemic that disrupted scheduled international services. The airline posted a net loss of Rs 72.33 crore in FY22, against a net profit of Rs 98.21 crore in FY21, according to the documents it submitted to the Registrar of Companies (ROC).

The Tata group took control of Air India and its subsidiary Air India Express on January 27 this year. Air India is in the process of being merged with another Tata group-owned airline AirAsia India.

Before FY22, Air India Express was in the red in FY15, when it posted a net loss of Rs 61 crore.

“Going forward, as market recovery picks up pace, the airline’s immediate efforts will be to focus on operational and financial stability, and a return to normalcy. This will include building up resources for increasing flying (hours), increasing average aircraft utilisation to pre-pandemic levels, and evaluating a moderate capacity increase,” the airline stated. Explaining the FY22 results in its documents submitted to the RoC, the airline said the second and the third wave of the pandemic impeded market recovery, particularly in the regional international markets, which are the mainstay of Air India Express.

Air India Express has 24 Boeing 737 planes in its fleet. Its total income and total expenses were Rs 3,522 crore and Rs 3,251 crore, respectively, in FY22.

During FY22, countries continued with varying degrees of travel restrictions, and international flight operations were maintained under the VBM (Vande Bharat Mission) and air bubble arrangements, the budget carrier mentioned.

India had suspended scheduled international flights from March 2020 to March 2022 because of the pandemic. During this two-year period, it formed bilateral air bubble arrangements with several countries, so that special limited flights could be operated between two nations amid Covid-related restrictions.

“The airline, as such, continued with its business continuity measures, by shifting capacity in alignment with demand patterns, keeping a close watch on route profitability, continuing with cutbacks in employee salaries, and focusing on cargo,” Air India Express explained. 

As a result of these measures, the company was able to contain its net loss at Rs 72.33 crore in FY22, the carrier mentioned. Its parent company Air India -- which has been making losses for many years -- reported a net loss of Rs 9,556 crore in FY21.

Air India Express said the passenger load factor of 59.9 per cent achieved in FY22 is “notable” as many flights were operated with only one-way/restricted passenger loads due to travel restrictions and bans imposed by many countries during the second wave of the pandemic.

Air India Express saw an increase of 56 per cent in passenger carriage with 2.29 million passengers in FY22, against 1.47 million passengers in FY21.

It operated 10,172 flights in FY22, of which only 190 were domestic services. Air India Express operates flights from India to 15 foreign cities: Dubai, Abu Dhabi, Sharjah, Ras-Al-Khaimah, Al Ain, Muscat, Salalah, Bahrain, Doha, Kuwait, Dammam, Riyadh, Jeddah, Singapore, and Kuala Lumpur. 

During FY22, revenue from cargo carriage went up by about 58 per cent, taking the net revenue to Rs 209 crore against Rs 132 crore for FY21, Air India Express said. “The quantum increase in cargo this fiscal year (FY22) is attributed primarily due to the 300 plus Cargo-in-Cabin flights (P2C) that were operated during the lockdown period. Each P2C flight could carry a cargo payload of approximately 15 Tons,” it mentioned.