AI Express hopes to make operating profit next fiscal
The proposed 'Air Kerala' is unlikely to make a dent in the market-share of Air India's international budget arm Air India Express, which hopes to post operating profit next fiscal, airline sources said.
Mumbai: The proposed 'Air Kerala' is unlikely to make a dent in the market-share of Air India's international budget arm Air India Express, which hopes to post operating profit next fiscal, airline
"We are currently competing with 16 players. So addition of one or two players will make hardly any difference," Air India Express sources told PTI here.
Low-cost Air Kerala, to be set up by Kerala government, was planning an April launch, but is yet to get Centre's nod.
Kerala Chief Minister Oommen Chandy's spokesperson said, "The government is very keen on the project and is awaiting the go-ahead from the aviation ministry. Many NRKs have evinced keen interest."
Kerala, with three international airports, is served by ten international carriers apart from domestic players Air India Express, Air India, IndiGo and Jet Airways. AI Express operates to ten destinations in the Gulf from Kerala.
Last September, Chandy revived the state's plan (announced back in 2006) to launch Air Kerala following a massive hike in ticket rates on the Gulf-Kerala sector as well as frequent flight cancellations by AI Express during the period.
About 2.5 million Keralites work and live in the West Asia.
Air India Express, which operates 205 flights per week across Southeast Asia and the Gulf with a fleet of 21 Boeing 737-800s, commands 5-6 percent market share. Of its planes, 17 are own, remaining leased. Majority of the flights are from Kerala, which contributes over 50 percent of its income.
The carrier is already Ebitda (earnings before interest, taxes depreciation and amortisation) positive and it may post operating profit in FY14, sources said. These expectations are based on continuous improvement in the cash-register.
The airline has not increased capacity in its summer schedule which comes into effect Sunday.
Sources also said the process to hire 40 commanders including trainees has started. The exercise would be completed by the Q1 of the next fiscal.
"Currently, we have around 200 pilots and half of them are on deputation from Air India. With the induction of 40 more commanders, we will meet the shortfall. Also, our objective is to have all our pilots in the carrier over the next three years," sources said.
The airline envisages a fleet of 35 by 2015 as a part of its turnaround plan. Once the additional pilots are hired, the airline will consider inducting more planes.
"Besides, we are also eyeing a minimum 2 percent uptick in load factor in the next fiscal, which currently stands at 75. Once the seat factor goes up, there will be consequential increase in market share," they said.