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AA320_ATFAirAsia India’s journey so far has been interesting. What was a pleasant surprise was the airline reporting its lowest ever net loss in an operating quarter – of INR 19 Cr. This, despite Q4 being a season of low travel demand, and in the same quarter having had numerous delays and cancellations. It was also the first full quarter of three aircraft operations.

AirAsia India claims to have an attractive cost structure. In this piece, we analyse their figures for Q4 FY’15.

Operating Figures

Operating Numbers Air Asia IndiaIn the months of January, February and March 2015, AirAsia India flew 222,502 passengers. No show passengers were 15,055. These two total to 237,557 seats that were sold. No show accounted for 6% of all sold seats. Total seats flown were 300,240, and flown passenger load factor was 74% for the quarter, while seats sold load factor was 79%.

The airline carried a total of 1,620 tonnes of cargo on 1,668 flights, which averaged to 971 kg of cargo per flight – a very good number.

A total of 2,260 hours were flown in the quarter. With three aircraft, this averaged to a daily average aircraft utilisation of 8:22 hrs per aircraft per day. This low average utilisation reflects the cancellations and delays in the quarter due to crew shortage. While the airline was originally scheduled to fly 22 flights a day, the average flights per day in the three months were lower due to the same reason.

12,155 of the airline’s passengers were affected by cancellations and delays of more than two hours in the quarter.

Market share stood at a constant 1% throughout the quarter.

Operating Expenses

Air Asia India Cost StructureAirAsia India realised an operating expense of INR 95.3Cr in the quarter.

37% of AirAsia India’s costs are due to fuel. The next biggest is staff salaries which make up 25%. Lease comes next at 19%. These three together make up 80% of the airline’s costs. In this period, the airline had three aircraft: VT-ATF/ATB/RED. All three are new enough to have no maintenance issues or checks, and hence maintenance is only 3%.

Average lease cost per aircraft is INR 2 Cr per month.

Revenues

AirAsia India realised an operating revenue of INR 74.4Cr in the quarter. Of this, 92% was due to passenger ticket sales, while 8% was due to ancillary revenue.

Unit Figures

The average fare per passenger (excluding taxes and fees) for the quarter was at INR 2,884. Revenue per available seat kilometre (RASK) was at INR 2.75/seat-km, while Cost per available seat kilometre (CASK) was at INR 3.53/seat-km.

At the same load factor, average fares could have been increased by INR 878 per passenger to operationally break even.

At the same average fares, operational breakeven load factor stood at 103%.

Both figures above assume constant ancillary revenue. Ancillary revenue per flight was INR 35,320.

Average operating cost per block hour was INR 421,311 (US$ 6,600).

Average cost per kilometer flown was INR 635/km.

Positive Trend

AirAsia’s losses are on a steady decrease. With five aircraft operating in Q1’16, better routes, and the strong travel demand, the airline may spring a surprise with its Q1 performance.

A sixth aircraft is expected to join the fleet in June. Q2’16 – a lean season- will be an interesting quarter to watch, with a mild possibility of a break even. The airline may either break even or post profits in Q3’16.

The airline added Imphal to its booking engine on 28th May 2015.

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