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AirAsia India achieves gross profit breakeven in April
AirAsia India, the joint venture low-cost carrier of Tata Sons and Air Asia, has achieved gross profit breakeven in April while targeting its next milestone of cash flow positive and turn EBITDA (earnings before interest, taxation, depreciation and amortisation) breakeven by 2018-end, said its Chief Executive Amar Abrol.
Claiming an aggressive plan of acquiring planes and hiring pilots and crew, he said they expect to receive second round of promoters’ funding by month-end to work towards reaching 20-mark in planes fleet before 2018. “Funding has been secured. We have been GP (gross profit)-positive since April, the month the new management team came into being,” Abrol told ET in Hyderabad on Wednesday.
“The next port of call is to get to cash-flow positive. The next year is massive for investment to get 10-12 aircraft which we can get over the next couple of years. Over the strategic framework of next three years, by 2018-end, we will get to EBITDApositive.” Abrol said the low-cost carrier, with the country’s highest load factor of 85%, is currently working on aggressively hiring pilots and cabin crew to train them. The airline is also looking at availability of planes in the open market for lease, apart from analysing the viability of entering certain Indian cities that were already overcrowded by domestic and global airlines.
On the delay in entering Mumbai, he said, “Mumbai is very slot-constrained at this point of time. Moreover, it has to make sense for us from a commercial perspective. It has to make sense if there is enough demand and whether the current incumbents are meeting or not meeting that demand.”
While highlighting that there is an opportunity for some 330 pairing of routes connecting various Indian cities with A320 airplanes, Abrol said AirAsia India will go to a city only if it makes commercial sense. “Mumbai will make commercial sense with the right time and product,” he said, without elaborating on the kind of product being worked out for Mumbai.
Indicating that AirAsia India’s Mumbai check-in may get further delayed, he said, “Right now, there are slot constraints and apparently there is some huge amount of repair and maintenance plan for the first quarter of 2017 at the Mumbai airport from the runway perspective. Once that is sorted out, we will start working with the airport authorities there and start looking for slots.” “When we go into Mumbai, we will go into Mumbai with a full plan so that we are able to capture a significant market share,” he said
On the limitations on availability of the planes, Abrol said AirAsia India currently operates single aircraft fleet, A320s. “Within that we need to make sure that the plane is in good working condition,” he said, adding that AirAsia India was also evaluating the model of mixed aircraft fleet. “We are constantly evaluating whether we will have mixed aircraft fleet as well or not.” Phil McConkey Womens Jersey
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