Air India Express Losses Threaten Air India’s 2027 Profit Goal

Air India Express, the low-cost carrier of the Tata Group, is navigating significant financial and operational challenges as it proceeds with its merger with AIX Connect (formerly AirAsia India). The airline’s net loss widened considerably in the financial year ending March 2023, even as it sets a target to achieve profitability by the year 2027.

The carrier recently faced major operational disruptions when a segment of its cabin crew staged a protest by reporting sick, leading to the cancellation of over 100 flights. This action was reportedly a response to grievances concerning new employment terms following the ongoing merger process.

Financial Performance and Merger Integration

According to the article, Air India Express reported a widened net loss of Rs 4,166 crore for the financial year ended March 2023, a significant increase from the Rs 2,389 crore loss recorded in the previous year. During the same period, the airline’s revenue from operations grew to Rs 12,696 crore from Rs 4,669 crore. The airline is currently in the final stages of merging AIX Connect with itself to establish a single, robust low-cost entity under the Tata Group’s aviation portfolio. This integration process has presented challenges, contributing to the current financial and operational turbulence.

Operational Challenges and Future Outlook

The recent cabin crew protest highlighted internal issues related to the merger. The crew’s grievances were linked to the new employment terms being implemented as part of the integration of the two airlines. The mass sick leave resulted in widespread flight cancellations, affecting numerous passengers.

Despite these setbacks, Air India Express is focused on its future growth strategy. The airline aims to achieve profitability by 2027. To support its expansion, the carrier plans to grow its fleet to 170 aircraft within the next five years. To operate this larger fleet, the airline intends to hire an additional 1,300 staff members, which will include 800 cabin crew and 500 pilots. Currently, Air India Express operates a fleet of 73 aircraft, serving 45 domestic and 14 international destinations. As of April, the combined market share of the two merging entities stood at 7.5 per cent.

Key Points

• Net Loss (FY ending March 2023): Rs 4,166 crore
• Net Loss (Previous Year): Rs 2,389 crore
• Revenue from Operations (FY ending March 2023): Rs 12,696 crore
• Revenue from Operations (Previous Year): Rs 4,669 crore
• Profitability Target Year: 2027
• Current Fleet Size: 73 aircraft
• Future Fleet Target: 170 aircraft within five years
• Network: 45 domestic and 14 international destinations
• Hiring Plan: 1,300 additional staff (800 cabin crew, 500 pilots)
• Flight Cancellations from Protest: Over 100
• Combined Market Share (April): 7.5 per cent

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