Friday, September 01, 2017

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. 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.
01/09/17 Malyaban Ghosh/Financial Express