Air India Express turns profitable for the first time



Air India is likely to enjoy acche din, as its low-cost international subsidiary Air India Express has turned the corner by reporting net profits for the first time since it started operations in April 2005. 

The airline reported a profit of Rs 362 crore during the 2015-16 fiscal, helped by lower fuel prices and improved revenues over the past year on the back of flying more people per flight. The airline had incurred losses of Rs 62 crore during the 2014-15 fiscal. 

Profits of AI express has come during the fiscal, when its parent Air India is also expected to make operational profit. The airline also found a mention in Prime Minister Narendra Modi's Independence Day speech, where he complimented the national carrier for improved financial performance. 

The financial results show that the airline's biggest benefit came from reduced oil prices that led to a 28.6% reduction in fuel during the FY16 fiscal from FY15. The overall reduction in cost was to the tune of 4.7%. The low-cost carrier, which operates a large part of its flights on the Gulf routes, also saw 11.3% increase in revenues. 

The increase in revenues came by flying more people per flight and all so utilising its aircraft more to operate more flight with the same fleet. An airline official, who did not wish to be identified, said that the airline has registered such huge profits after paying about Rs 240 crore as revenue share to its parent Air India. According to the agreement between the two, AI Express has to share about 11% of its revenues with Air India for using its brand name. 

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