Air India Express projects first operating profit since privatisation

Air India Express projects its first operating profit since privatisation, driven by strategic initiatives and cost management. The airline has doubled its capacity, tripled market share, and aims to operate 300 aircraft by FY31 as a 'value carrier'.

Air India Express (AIX) is projected to report an operating profit in the second half of the current financial year, marking its first such financial milestone since privatisation. The airline management attributed this projected turnaround to a series of strategic initiatives implemented throughout the year.

Strategic Initiatives Drive Profitability

According to sources, during a monthly town hall meeting at the airline's headquarters, leadership shared that the anticipated operating profit reflects improving unit economics, disciplined cost management, and stronger operational performance. Addressing teams across various functions, the company's top officials noted that a focused commercial strategy and sharper capacity deployment have started yielding results.

The management underlined that ongoing investments in fleet, systems, and people are aimed at building a scalable and resilient airline. Highlighting the long-term vision, the officials noted that while operating profit is an important achievement, the focus remains on sustaining performance, improving margins and delivering dependable service.

Ambitious Growth and Market Positioning

The airline has experienced significant growth since privatisation, with its Available Seat Kilometres nearly doubling and its market share tripling. The management outlined plans for exponential growth, aiming to triple its current scale by FY31. By that period, the airline intends to operate a fleet of 300 aircraft and secure a 25 per cent market share.

Defining the 'Value Carrier' Model

Sources stated that the strategy for Air India Express is not to function as a Full-Service Carrier or a Low-Cost Carrier, but rather as a "value carrier positioned between an FSC and an LCC, with a premium, differentiated experience." To support this positioning, the airline is investing over USD 70 million in a retrofit program.

Operational Excellence and Customer Experience

Operational metrics indicate a transformation in customer experience, with the airline's Net Promoter Score (NPS) reaching an all-time high. Air India Express has also maintained the highest On-Time Performance in India, ranking first for the past two months.

Currently, the airline stands as the second-largest carrier in India in terms of domestic routes and international routes. Its network includes 110 domestic routes and 75 international routes, maintaining a nearly even allocation between international and domestic sectors at a ratio of 54:46.

The management reiterated its commitment to prioritising operational excellence and customer experience while maintaining financial discipline.

Background: The Tata Group Acquisition

In 2021, the Government announced that the Tata group made a winning bid of Rs 18,000 crore for Air India.

Subsequently, on October 25, 2021, the Indian government inked a share purchase agreement with the Tata Group for the handover of Air India.

On January 27, 2021, the Tata group took ownership of Air India. (ANI)

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