Alliance Air, which is branded as Air India Regional, received its 5th brand new ATR 72-600 from Toulouse. The aircraft, registered VT-AIW, joins the fleet of four other ATR 72-600s, registered VT-AII, VT-AIT, VT-AIU and VT-AIV. Al five aircraft are leased from Singapore based leasing company Avation.
The ATR 72-600s, which employ an all new cockpit avionics based on technology used on the Airbus A380, is to replace the aging fleet of four ATR 42-320s. The ATR 42-320s in Alliance air are fitted with 48 seats, while the ATR 72-600s are fitted with 70 seats. The older ATRs sport a four bladed propeller, which made the aircraft noisier than the present six-bladed propellers. Passive noise reduction techniques make the present -600’s cabin a lot more pleasant than the older ATRs’.
With the arrival of VT-AIW, which was ferried Toulouse (TLS) – Heraklion (HER) – Ankara (ESB) – Abu Dhabi (AUH) – Delhi (DEL), the total count of active ATR 72s in India (-500 & -600) has gone upto 27, split as 15 ATR 72-500 (Jet AIrways) + 3 ATR 72-600 (Jet AIrways) + 5 ATR 72-600 (Air India Regional / Alliance Air) + 2 ATR 72-500 (Air Pegasus) + 2 ATR 72-500 (TruJet). One ATR 72-500 is undergoing painting at Hosur, destined for Air Pegaus.
India totally has 51 70-80 seat turboprops in service, including 14 Bombardier Q400s of SpiceJet. The smaller ATR 42s, aged on average 21+ years, will soon be phased out.
Air India Regional / Alliance Air flies the longest turboprop route in the country, between Delhi and Rajkot, over 505 nautical miles, a flight that takes 2:30 hours block time, almost the same block time an Airbus or Boeing mainline narrowbody jet (A320 & 737 family) takes to fly double the distance. Due to insufficient crew, and to align with the schedules of the network of its parent Air India, the ATRs at Alliance Air are not utilised as much as the aircraft can be. Average present utilisation of the aircraft at the airline is close to 6 hours per aircraft per day. The aircraft operate only four flights a day, while Jet Airways operates upto 13 hours per aircraft per day and 9 flights per aircraft per day. (maximum figures).
Of the presently four operational ATR 72-600s with Alliance Air, three are based at Delhi, and operate flights to Kullu, Dharamshala, Allahabad, Dehradun, Rajkot and Pantnagar. One is based at Hyderabad, and operates flights to Vijayawada and Tirupati, offering competition to TruJet and Air Costa.
An ATR 72 is best suited for short (distance) and thin (low demand) routes of upto 350 nautical miles. Beyond this, a regional jet generally becomes a more viable and economical option. The shortest ATR 72 sector in India is operated by Jet Airways between Porbandar and Diu, a flight that lasts just 45 minutes block time over a distance of 90 nautical miles (166km). The average ATR 72 city pair distance in India is 223 nautical miles (413 km), while the average domestic flight distance across all domestic flights of all carriers on all aircraft in India is 455NM (843 km).
70-80 seat turboprops serve as good feeder aircraft to mainline aircraft, enabling deeper and true regional penetration in India, especially since many airfields and city pairs in India, today, are operationally and commercially unviable for regional and mainline jets. Many runways are too short for regional and mainline jets, and many cities are too underdeveloped to viably support larger aircraft.
The maps below show the pan-India coverage that turboprops can achieve by being based out of five metros of Delhi, Mumbai, Kolkata, Bengaluru and Hyderabad, and by flying a maximum distance of 400NM. Range circles are 300NM and 400NM radius, as mentioned.
Over the next 20 years, a demand for 2,500 turboprops is anticipated, of which close to 50% may be based at Asia.
Header image does not represent VT-AIW, but VT-AII.
SpiceJet, which is the only low cost/fare airline in India to operate with more than one type of fleet, including Boeing 737-800s, Boeing 737-900s, Bombardier Q400 turboprops, today brought in more fleet diversity through the induction of a wet-leased Airbus A320.
The airline had wet-leased two Airbus A319s in the recent past, one of which (LZ-AOA) is still flying with SpiceJet. The A319 that is still flying for SpiceJet is from BHair (Balkan Holidays), and the Airbus A320 inducted today is also from the same operator. This is perhaps a symbol of confidence in operators in wet-leasing airplanes to SpiceJet, perhaps indicative of a more stable financial situation that allows for on-time payments. Boeing 737 wet leased aircraft that earlier flew for SpiceJet in the summer peak season have also returned for another peak-season term.
The Airbus A320 MSN 2863, registered LZ-BHH, previously flew for IndiGo as VT-INB. VT-INB was the second Airbus A320 to be inducted into IndiGo, and exited the fleet in 2012. Sale-Leaseback contracts at IndiGo were earlier for a period of 6 years, which has since been extended after 16 airplanes, following a sooner-than-needed capacity expansion after the collapse of Kingfisher in 2012.
With two Boeing 737-800s dry leased by SpiceJet in scheduled maintenance, the airline today has an active fleet of 23 mainline jets (Boeing 737-800s, Boeing 737-900s, Airbus A319, Airbus A320) and 13 Bombardier Q400s.
The Delhi <> Goa sectors, and the Delhi <> Guwahati sectors will get an additional frequency. The new sector that the airline is expected to operate is Delhi- Vishakhapatnam. Delhi to Vishakhapatnam will depart at 6:05 am as I52551, and will depart Vishakhapatnam at 8:35.
The total number of flights on the Delhi<>Goa sector goes upto thrice daily, and the number on Delhi<>Guwahati goes upto twice daily, from November 17th.
However, the airline now has two flights to Goa from Delhi (and back) spaced just 45 minutes apart, which may lead to cannibalization, pronounced during the off-peak seasons.
The new Delhi – Guwahati flight gives a Delhi passenger the option of a meaningful day return on the same airline.
One of the three aircraft patterns is expected to be dedicated to these new route and frequencies. Aircraft operating the pattern will fly DEL-VTZ-DEL-GOI-DEL-GAU-DEL, accumulating a block time of 14:45 hrs.
With the addition of the new aircraft and the related routes, the airline will increase capacity (measured in available seat kilometres) by 24% over the existing network, and will increase seat capacity by 17% to 7,200 daily seats. Daily flights will increase to 40 from the present 34.
Unlike in the summer peak season when the airline had two airplanes on ground for nearly two months, and incurred setup costs associated with the opening of four new stations (Delhi, Guwahati, Vishakhapatnam, Imphal) the airline in the winter peak season is not opening any new stations, thereby incurring no one time costs related to the network.
Presently, the airline is only selling the new DEL-GOI-DEL and DEL-GAU-DEL flights. The DEL-VTZ-DEL flights are yet to be announced and opened for sale.
AirAsia India, which has been slow in its growth owing to a primarily domestic-international network strategy that was thwarted by the unreasonable delay in lifting the 5/20 rule (a rule requiring an airline to fly international only after flying domestic for 5 years, and a minimum fleet size of 20 airplanes), received its 6th aircraft at Hyderabad’s Shamshabad airport at the MAS-GMR MRO facility.
The aircraft, bearing MSN 4346, previously flew for Indonesia AirAsia as PK-AXL. It is a non-winglet airplane, and is 5 years 4 months old.
It has now been re-registered to VT-APJ, as a tribute to late Dr. A.P.J Abdul Kalam.
This is AirAsia India’s third non-winglet airplane. This is also the fourth airplane to be dedicated to a person (living and dead) or a place. The other three are VT-ATF (Tony Fernandes), VT-JRT (JRD Tata) and VT-BLR (Bengaluru).
This is perhaps the last airplane the airline will induct in this calendar year – something we had mentioned earlier.
With this, AirAsia India will be adding capacity during the winter peak season. The airline may start operating new sectors or additional frequencies only towards mid-late November 2015.
Due to the late announcement of routes, some of the lowest airfares may be found on AirAsia’s network. While this is good for passengers, it may adversely impact the airline’s unit revenues.
The airline has however started offering via flights – Passengers from Delhi can fly to Imphal via Guwahati, something which the airline did not offer earlier. Via flights will help improve revenues at the airline – something we had mentioned earlier.
While total costs in the airline will rise with the induction of the 6th aircraft, unit costs are expected to slightly fall, which is good for the airline.
The 6th aircraft may be based at Delhi, and may connect the national capital to Visakhapatnam, among other frequency/route additions.
Air Costa, India’s first regional jet airline, turns 2 tomorrow (15th October 2015). The airline, which is the second airline in India after the now defunct Paramount Airways to operate the Embraer E170s, is terminating lease on the aircraft, making Air Costa perhaps the last Indian operator to employ the 70-80 seat regional jet.
The airline’s two Embraer E170s, registered VT-LSR & VT-LNR, were the first two airplanes for the airline, leased from Embraer’s ECC leasing. The aircraft earlier flew for Gulf Air, which had fitted the cabin with 67 seats : 7 business and 60 economy. The aircraft can pack in a maximum of 78 seats in a single class configuration.
The airline has cancelled up to 4 flights owing to one of the two E170s (VT-LSR) being returned in November. As of today, out of the 32 daily flights the airline used to operate to 9 destinations, it presently operates 25-26 flights. This is further expected to go down to around 15 – 16 flights per day in the next 10 days. When two new Embraer E190s are inducted, the airline will resume the flights previously operated by the E170s starting 1st Dec 2015.
Due to this, Air Costa does not seem to sell for, and operate certain E170 sectors between 25th Oct and 30th Nov (as per the website), till these are operated by the replacement aircraft, an Embraer E190, 1st Dec onwards. These sectors are captured in the table on the left. The airline has opened sales for these sectors for travel December 1st onward.
The airline does not seem to sell (indefinitely, as per the website) the E170 sectors operated by the other aircraft. These include:
Vijayawada <> Hyderabad
Vijayawada <> Chennai
Vijayawada <> Vishakapatnam
Chennai <> Hyderabad (Daily)
Frequencies on routes such as Bengaluru<>Vijayawada has halved.
Air Costa’s two other aircraft – Embraer E190s registered VT-LBR & VT-LVR, leased from GECAS, shall remain in the fleet, one of which would be going for a scheduled maintenance in mid-November. The Embraer E190 is a money maker for the airline, and Air Costa is using the asset to its strength. The 2 E170s will be replaced with 2 E190s in the next 3 months.
Based on studies by The Flying Engineer, small capacity regional jets of less than 100 seats have limited relevance in the Indian market, today. A great way to capture the market is to complement the Airbus A320 / Boeing 737s (180 seat airplanes) with an aircraft of nearly 50% – 60% capacity, making the Embraer E190 with 114 seats (maximum) an ideal airplane for routes with insufficient demand for a 180 seat airplane.
Air Costa will be able to connect Tier II and Tier III cities across the country with any Tier I city once its air operator permit (AOP) is converted from a scheduled southern regional airline to a scheduled (pan-India) airline operator permit. This change of AOP is expected to happen soon. However, the airline’s network will continue to be focused on the regional segment, but at a pan-India level.
With the airline demerging from other projects of the parent company, Air Costa is ready to attract external investments into the airline. It plans to induct 4 aircraft every year, from 2016. By 2018, the airline plans to have a minimum fleet of 12 aircraft and fly to 18 stations.
Air Costa presently operates to 9 destinations. A major network change is expected in light of the change in fleet. Bhubaneswar, Pune, Guwahati, Indore, Patna and Bhopal are expected to be added to the network when the fleet size touches 8.
Besides all the visible innovations that SpiceJet is grabbing the headlines for, the airline is doing certain other things quite differently.
Any airline will like to make the most of a peak season by increasing flights, and providing increased connectivity and flight options. There are two ways to do this : by growing the fleet or by flying the airplanes harder. SpiceJet is doing both.
The airline does not yet seem to be ready to lease more airplanes the conventional way. It instead is wet leasing airplanes from eastern European airlines, which have capacity to spare. In the month of October, the airline will be inducting 6 Boeing 737s on a wet lease (ACMI lease) basis – which means the airline will not have to bother about flight crew, cabin crew, maintenance and insurance. Wet leases can turn out to be more expensive than a dry lease with in house crew, maintenance and insurance, but it offers SpiceJet one big advantage – to modulate its capacity to suit seasonal demand.
SpiceJet today is the only airline in India to be actively wet-leasing airplanes to bridge capacity shortfalls.
The airline presently has one Airbus A319 wet leased, and 2 of the 6 wet leased Boeing 737 NGs to be inducted this month have arrived – OK-TVX and OK-TSF. OK-TVX flew for SpiceJet during the summer peak season, along with two other Boeing 737-800s. The two 737s arrived on 8th October, 2015.
The airline’s remaining Boeing fleet is all dry leased, and the Q400s are owned. Of the 20 Boeing 737s, 16 are Boeing 737-800s and 4 are Boeing 737-900s. Before the 2 wet leased airplanes arrived, one Boeing 737-900 was undergoing heavy scheduled maintenance, ‘C’ checks. After the two leased airplanes arrived, a Boeing 737-800 went into scheduled maintenance. In total, the active narrow body mainline jet fleet as of today is comprised of 15 dry-leased Boeing 737-800s, 3 dry-leased Boeing 737-900s, 2 wet leased Boeing 737-800s and 1 wet leased Airbus A319, in addition to 14 Bombardier Q400 turboprops of which 13 are active. The total active fleet is 34 airplanes strong, which is expected to rise to around 40 during November-December. The peak season starts in a week’s time.
To aggressively take on the domestic and international markets despite a small fleet of airplanes, SpiceJet has been pushing its Boeing 737s to fly much harder than usual. Some of the Boeing 737s operate 19:30hrs, 17:50 and 16:35 hrs. These patterns flown by the 737s witness the airplanes flying hard during the day, and operate long international sectors at night/early morning.
Of the LCCs in India, only two fly international – SpiceJet and IndiGo. IndiGo, which also operates late night / early morning international flights, operates its airplanes only upto 17:45hrs of utilisation, on a pattern that involves a late night Chennai-Singapore return flight. One of the airline’s patterns is all-international with just 4 flights, MAA-DXB-TRV-DXB-MAA, which uses the airplane for 17:35hrs. Both these patterns, however, are not as heavy in utilisation as SpiceJet’s.
While SpiceJet pushing its airplanes to fly harder increases revenue potential and dilutes costs, it also results in a higher chance of cascading network delays in case one flight gets significantly delayed. Having significant gaps between patterns reduces the chances of the delays of one day from cascading into the second day.
On the Q400 front, the airline pushes certain Q400s to operate upto 13:15hrs per day, with an average, network-wide utilisation of around 11:30hrs. This is good for a turboprop that operates mostly domestic. SpiceJet’s Q400 turboprops are the only turboprops in India that fly scheduled international services.
Vistara, which is on track with its fleet expansion plans, received its 8th Airbus A320-232SL at Toulouse. The aircraft, registered VT-TTI and bearing manufacturer serial number (MSN) 6785, is flying from Toulouse to Delhi via Ras Al Khaimah International Airport (UAE), where it will stop for refuelling before continuing to Delhi.
This 8th aircraft, along with the recently accepted 7th aircraft (VT-TTH) will allow the airline to either expand or strengthen its network. The timing of the airplanes is good – allowing the airline to build capacity for the peak season – the months of October, November, December, and part of January.
The airline’s 9th aircraft is expected in the month of November. The airline will close calendar year 2015 with a fleet of 9 aircraft.
Vistara today flies to 11 destinations, with the 12th destination – Varanasi – being added on the 21st of October. All 8 airplanes will be flying 21st October onwards.
The airline, with the 8th aircraft, has the capacity to deploy an additional ~6 flights. Offering a morning BLR-DEL and an evening DEL-BLR is important to raise the appeal of the airline’s network. It will not be surprising if the airline adds a pattern that flies BOM-BLR-DEL-XXX(perhaps VNS?)-DEL-BLR-BOM, to offer its customers better connectivity to BOM and DEL from BLR.
The airline, which has flown nearly 6,50,000 passengers till end September 2015, is expected to cross the 1 million passenger mark by December 31st, 2015, considering the peak season and the addition of capacity with three new airplanes.
Air Pegasus, which started operations mid April and now has a fleet of 2 ATR 72-500s, is impacted by shortage of crew to fly its aircraft.
The Bangalore based airline, which in August announced a second frequency to Hubli, to allow for a day return for passengers from either city, has not yet operated the morning 7:05 Hubli flight since 20th August 2015, effectively serving just one flight either way, each day. The airline isn’t yet accepting bookings for the morning Hubli flight.
The airline has reportedly stopped operating flights to Cuddapah since a significantly long time. The airline is next open for bookings to Cuddapah only on the 11th of October. Air Pegasus inaugurated the Cuddapah airport, and was the only operator flying to the city. It operated the first flight to the city on 7th June, 2015.
Crew shortage is preventing the airline from both operating scheduled flights as well as expanding or strengthening the route network. Cancellation rates at the airline, which started at 0%, started increasing month on month to touch the airline’s high of 5.81% in the month of August.
Air Pegasus presently operates two ATR 72-500 registered VT-APA and VT-APB, both ex-Kingfisher ATR 72s leased from Elix Aero. The airline is presently scheduled to operate 16 flights a day (except Tuesdays), of which it currently operates only 12 – 14 flights a day. The maximum present daily aircraft utilisation is 10:50 hrs, and an average of 8:10 – 9:15 hrs per aircraft per day. Till the 31st of August 2015, the airline had flown 40,930 passengers with an average load factor of 75%. The average distance flown per flight is 435km, and the average block hour duration is 1:20 hrs per flight.
Air Pegasus is one of 5, 70-seat turboprop operators, and one of 4 ATR 72 operators in India. Trujet and Air Pegasus are the only two scheduled airlines in India to operate an all ATR 72 fleet.
Operational exigencies are common and happen to every airline. Last evening, one of AirAsia India’s five aircraft, registered VT-BLR, Airbus A320-216 (bearing serial number 4070 manufactured 6 years ago), while operating I5 1321 – the Goa to Bengaluru flight – returned to Goa immediately after departure, as it reportedly suffered an engine bird strike on departure. The aircraft returned safely to Goa, where it remains grounded at the time of writing.
A second aircraft, VT-ATB presently based out of Delhi, operated I5 2327, the scheduled Delhi-Goa afternoon flight. On landing at Goa, it operated 1321 – the Goa – Bengaluru flight. The aircraft later performed a late night ferry (non-commercial flight) from Bengaluru to Goa, and then carried the Goa-Delhi passengers, landing at Delhi at nearly 3:30am.
VT-BLR’s temporary grounding had affected the airline’s network. The previous night’s Bengaluru-Vishakapatnam-Bengaluru and Bengaluru-Cochin-Bengaluru flights, which were to have been operated by VT-BLR, were delayed by around 3 hours and 1 hour, respectively, as other aircraft (VT-ATF, VT-JRT) had to operate these flights after finishing their usual patterns. The pattern of only one of five aircraft: VT-RED based at Delhi, was not affected.
As a result of VT-BLR’s grounding at Goa, today morning’s Bengaluru-Jaipur-Bengaluru (I5 1720/1721), and the afternoon Bengaluru-Goa-Bengaluru (I5 1320/1321) have been cancelled, while the evening Bengaluru-Jaipur-Bengaluru (I5 1722/1723) flights have been delayed by at least 2 hours.
Training flights on VT-JRT at Bengaluru’s HAL airport, conducted last night, were not affected.
The aim of this entry is to study how the airline handled an incident, and the effects of such an incident on the network, and not to comment on or judge its ability or methodology.
Edit (30th Sept): Edited to include the first flight of the first production A320NEO, which is destined for IndiGo. Edit includes a confirmation of a Space Flex cabin.
Indian domestic market leader IndiGo’s first Airbus A320 NEO (New Engine Option) – part of the July 2011 order for 180 aircraft, has rolled out of the Hamburg (Germany) final assembly line fully painted in the airline colors, but without the Pratt & Whitney Geared Turbo Fan (GTF) Engines. This is the third such airframe of the airline. Two have no engines fitted. The cabin has not been fitted yet.
MSN 6720, destined for IndiGo, first flew on September 25th at Toulouse, France. The aircraft fuselage has however not been painted in the airline’s colors, but the wings are in the airline’s markings. MSN6720 is the 6th NEO to be produced, and the first ‘production’ NEO. The to-be Indian Registration of MSN 6720 is yet unknown, but will likely be the first A320 NEO for IndiGo.
A320-271N MSN 6744, which is expected to be registered VT-ITA, is the 7th NEO produced, and likely the second for IndiGo. A320-271N MSN 6799, to be registred VT-ITC, is likely IndiGo’s third A320 being assembled at the Toulouse (France) final assembly line, and is the 9th NEO to be produced. All Airbus A320 NEOs that IndiGo will accept will be powered by the Pratt & Whitney PW1127G engines.
The same engines had a problem with a clip holding seals inside the engine. This had caused concerns on the NEO program schedule, which has invariably slipped a bit. However, launch customer Qatar Airways expects to receive the first aircraft by the end of the calendar year. Interestingly, Qatar’s A320 NEO is MSN 6772 – the 8th NEO – which means it is later down the assembly line sequence when compared to IndiGo’s 6744 and 6720.
The NEOs rely on the sharklets and new, ultra-high bypass geared turbofan engine technology to together deliver fuel savings of upto around 15% (over and above today’s CEO A320’s without sharklets) . Such high fuel savings will however be realized only on very long flights that approach the maximum range of the airplane.
Airbus’s “Space Flex” concept allows airlines to increase the seating capacity of the Airbus A320 (both current engine options (CEO) and NEO) to 189 seats, without compromising on seat pitch and comfort. This is achieved by moving the two rear lavatories closer to the bulkhead, eating into the galley space. This makes more sense to no frills carriers which do not carry much meals on board. The space for service trolleys in the aft galley of the aircraft reduces from 7 to 3. The space where the aft lavatories were fitted are replaced with 1.5 rows of seats.
This increase in number of seats reduces unit costs by 5% to 6%. It is not known if IndiGo will adopt the space flex concept yet. No physical changes to the emergency exits are required. However, opting for a mix of 189 seat and 180 seat A320s may reduce operational flexibility for the airline. Opting for a higher capacity however seems inevitable.
IndiGo is believed to have opted for the Space Flex cabin, but details on when it will appear are not known.
Among all airlines to have started operations with mainline jets (Airbus A320 or Boeing 737 aircraft), AirAsia India’s growth (in terms of passengers flown) has been better than only GoAir’s. While GoAir’s average aircraft fleet in the first year of operations was higher than AirAsia India’s, but flew with poor load factors.
Air Deccan is not considered as the airline started operations in October 2003 with 48 seat ATR-42 aircraft and inducted its first Airbus A320 only in July 2004 – 9 months after starting operations.
Until the issue of flying international is resolved, AirAsia India may induct just one other Airbus A320 into its fleet by the end of the calendar year 2015, taking the total fleet size to 6. Vistara will however induct 3 more to take the total fleet size to 9 aircraft by the end of the calendar year.
Vistara’s total passengers flown at the end of the fifth full month of operations (June) is slightly better than what Kingfisher flew in the corresponding period.
Vistara may have flown close to 450,000 passengers towards the end of July 2015, since start of operations. The airline is expected to fly its 500,000th (half millionth) passenger during the second or third week of August 2015.
In a previous piece, The Flying Engineer had estimated the operational profit of SpiceJet to lie in the INR “around or less than between INR 80 – 110 crore” range. The airline realised an operational profit of INR 70.7 crore. With the results declared exactly a week ago, we shall analyse the actual performance of the airline in Q1 FY 2015-16 (Q1’16).
We first start with costs, as an airline usually has a better grip on costs than revenues. Capacity is measured in seat-kilometres (Available Seat Kilometre – ASK), and costs and revenues, from operations, are referenced to unit capacity. We compare Q1’16 with the same quarter in the last financial year – Q1’15.
Average fuel price in Q1’16 was 28.4% lower than that in Q1’15. The fleet had also shrunk from a Bombardier Q400 : Boeing 737 ratio of around 1:2 to 1:1.3. This impacted fuel costs positively. Due to this ratio, a larger portion of the fuel burn was realised by the Q400s, which enjoy a flat 4% sales tax on fuel, as against as much as 28% sales tax in some airports, applicable to the Boeings. With operations being dominated more by the Q400s, which fly routes much shorter than the Boeings (upto 85% shorter routes on the domestic network), the average stage length had reduced, leading to an increase in the number of departures per unit capacity. More departures and hence landings per unit capacity translates to a higher fuel burn, but this was offset by the Q400’s lower fuel price and perhaps better fuel saving techniques employed at SpiceJet. Unit fuel costs fell by 30.3% despite fuel prices falling only 28.4%.
The changed turboprop : mainline jet fleet ratio also affected lease costs. The Q400s are owned, and hence no lease is paid for such airplanes. As a result, the lease costs of the Boeings (including the wet leased Boeings and Airbuses) were diluted over a capacity that was generated in a larger part by the Q400s. Unit lease rental costs fell by 12%.
Poor on time performance and increased cycles per unit capacity may have led to increased airport charges, though the Q400s do enjoy landing and navigation charges benefits. It is also possible that there may have been an increase in landing, navigation, other airport charges, in flight & other passenger amenities by authorities. Unit airport charges rose 14.8%.
Aircraft maintenance costs were dominated in larger part by the Q400s, which were also utilised higher. The US Dollar strengthened 6.1% against the rupee, which would have led to increased costs. Maintenance costs for each Boeing are expected to have remained largely unchanged. Unit maintenance costs rose by 14.9%.
The quarter witnessed no significant aircraft re-delivery activity, which dropped unit re-delivery expenses by 90.4%.
Other operating costs rose by 45.7% per unit.
Unit employee expenses were impacted by both having a smaller capacity, and the hike in salaries to crew to stop pilots from leaving the airline. This resulted in unit employee expenses rising by 25.5%.
Depreciation and Amortisation expenses are largely dominated by the Q400s. With lower capacity, this expense was rose on a unit basis. Unit Depreciation and Amortisation costs rose 36.2%.
Other expenses, which include a wide variety of costs including hotel and accommodation expenses for crew, dropped by 16.3% on a unit basis.
Overall, unit costs dropped by 12.8%, aided largely by the absence of significant re-delivery expenses and the steep fall in fuel prices. The airline has scope to further streamline costs in at least three areas, with the other areas being out of the airline’s control. When streamlined, either through practices or scale, unit total operational expenses may further fall by 4.3%. With the present scale of operations and in the present environment, this translates to INR 45 crore.
The cost structure at SpiceJet, Q1’16 v/s Q1’15 is shown below:
SpiceJet’s revenues were adversely impacted by lower airline capacity, poor on-time performance, and increased competition leading to lower prices. The first two factors may have made the airline lost high paying, time-sensitive and last minute (D0-D7) passengers. In the 13 month period June’14 to June’15, SpiceJet had the lowest OTP amongst private airlines for 9 months. Further, the cargo carried by the airline on a unit basis dropped by 4.9%, perhaps on account of Q400s dominating a larger part of the capacity. Unit sales fell by 1.1%.
Other operating income rose by 56%.
In total, operating revenues fell by 1% on a unit basis.
(If the Q1’15 P&L statement was not re-classified, unit revenue would have fallen by 2% during the comparison)
Per passenger Revenues
In Q1’15, the sales per passenger (includes ancillary revenue) was a good INR 5,006 per passenger (at re-classified P&L figures). In Q1’16, the the sales was INR 4,215 per passenger. This represents a drop of 15.8% in the sales per passenger.
Usually, a drop in the sales per passenger should not be a concern if the airline flies more passengers. However, a drop in net sales per passenger per ASK (the first number in the unit revenues and cost graph above) is a cause for worry. The drop was INR 0.05/seat-km). This shows that sales per passenger has dropped to a level that overall leads to lesser revenue despite very high load factors.
To put things in perspective, the below graph shows the per passenger sales required to achieve the same net sales from operations, with varying load factors. For example, flying with load factors of 55% at INR 6,939 sales per passenger will generate the same sales as flying 90% load factor at INR 4,240.
In Q1’16, SpiceJet had load factors of 90.5% (Domestic + International). In Q1’15, SpiceJet had load factors of 79% (Domestic + International). If SpiceJet was to have realised the same revenue in Q1’16 with only 79% load factors,the airline would have needed a per passenger sales of INR 4,833. However, the airline in Q1’15 (same quarter, last year) had a per passenger sale of INR 5,006.
This means that had SpiceJet flown with Q1’15 load factors and per-passenger sales, would have realised an increase in sales of 3.6% or INR 39.53 crore in Q1’16. This shows that increase in load factors does not always imply an increase in either Revenue per seat kilometer (RASK) or total revenues.
To have realised this additional INR 39.53 crore, SpiceJet should have generated sales of INR 4,366 per passenger (+INR 151) in Q1’16 at 90.5% load factors.
Of course, unit revenues (RASK) is the most reliable method of gauging performance. But, in the case where RASK falls, the argument above is used to show that the load factor game must be played carefully.
The above argument does not consider the fact that per passenger sales and/or RASK (RASK and per-passenger sales are not directly comparable) can be safely reduced when per passenger costs and/or CASK also reduce. Ultimately, profit is driven by the difference of revenues and costs, and not determined by either revenues or costs alone.
Unit operating profit rose by 201%, despite a fall in unit revenues, largely due to a fall in costs. Fuel today accounts for 35% of the SpiceJet’s operating expenses. Last year, for the same quarter, fuel accounted for 43% of SpiceJet’s operating expenses. If aircraft fuel prices were at the 2014 April-June levels, the airline would have flown into the red.
Had the airline maintained the unit revenues (RASK) of Q1’15, the airline would have generated an additional INR 11.4 crore over the Q1’16 operating revenue of INR 1,106 crore.
Other income at the airline was INR 26.7 crore, against INR 28.9 crore in Q1’15 (re-classified).
Finance Costs in the airline was INR 25.5 crore, against INR 48.7 crore in Q1’15
Profit before tax
In Q1’16, other income (not from operations) and finance costs are almost equal, cancelling out each other. This makes profit in Q1’16 solely due to operating profits, unlike the Q4’15 quarter (ending March 31st 2015) where the airline stepped into profits due to the insurance payoff. Operating loss in Q4’15 was INR 102 crore. Operating loss before depreciation and amortisation expenses was INR 72 crore.
Hot and Spicy or Red?
The Hot and Spicy part is the reduction in finance costs. The Red part in in the operational costs and revenues. Overall, the airline has the potential to perform much better, and hence we’d consider the performance Red, despite the profit. The turnaround has started, but the airline is not yet ‘there’. Costs have to lean and revenues must grow. Good on time performance (OTP) is key. As seen above, sale per passenger and RASK have taken a hit, perhaps largely due to the poor OTP of SpiceJet, and in part due to competition.
Comparison to Estimate
In the estimate of SpiceJet’s Q1’16 performance (click here to read), our estimate of total operating expenses was lesser by 0.26%, while our estimate of revenue from operations was higher by 1.67%. Changes in accounting practices (re-classification, as declared in the Q1’16 financial results) have also impacted the estimate errors. The lower or our estimate of the airline’s operating profit was higher than the actual by 13%. Below is the comparison:
SpiceJet had a great opportunity to report profits in Q3’15 (the quarter ending December 31st, 2014). It didn’t. Before the quarter could conclude, the airline had stalled.
Then there was a stall-recovery. The Marans got out and Ajay Singh got in. The very next quarter, Q4’15, saw the airline posting a net profit thanks to an insurance claim from a Q400 that was written off at Hubli.
Legacy issues, one time costs, redelivery expenses, economic slowdown, high dollar rates, and high fuel prices were some of the reasons given in the past. This time around, the situation is much better. Ajay is doing a good job renegotiating contracts in manners that benefit the airline.
SpiceJet introduced the Q400s in 2011 as a game changer. The move was not in line with what low cost carriers world over had practiced. After Air Deccan, SpiceJet became the second low cost carrier (which we prefer to call low fare carrier) in India to adopt a dual fleet strategy.
The reasoning was simple enough. First, India is a country where certain routes are saturated while many routes with potential are unexplored. This is largely due to the misconception of a ‘one aircraft fits all’ strategy. Having an oversized airplane (in terms of seats) fly on routes that have insufficient demand only leads to poor control on pricing and revenue management. The hope that some routes will eventually grow to cater to the large jet is unwise. The right sized airplane matters. Second, blindly copying and pasting to India a low cost model that worked wonders overseas is again unwise. Every market is unique, and requires its own study.
But perhaps, SpiceJet wasn’t ready to handle the Q400. Perhaps, SpiceJet did not pull off a good deal with Bombardier. Perhaps, SpiceJet’s study was half baked. Perhaps, SpiceJet was short sighted and the turboprop may have performed better in the hands of a smarter, shrewder operator. But most importantly, perhaps the Q400 fleet and staff were meted with a step-motherly treatment.
Optimisations in the Q400 fleet are only now becoming visible. Ajay Singh is using pressure tactics to squeeze Bombardier to give the airline more. A few Q400s are expected to join the fleet, with the insurance payoff from the Q400 that was written off in a runway excursion at Hubli. The Q400 fleet size reduced to 14 Q400s from 15, and one Q400 that was cannibalised has now been restored and is apparently due for a maintenance test flight. The airline has also started to optimally fly its airplanes, to realise fuel savings and time savings. Time saved can accumulate to fly an additional sector. The airline is also working to better integrate the Q400 network with its Boeing network. After all, the Q400s are intended to primarily serve as feeders. Salaries of the Q400 flight crew have been brought on par with those on the Boeings.
The airline, four years late, has realised that the Q400 cannot play the ATR game. The Q400 must play the Q400 game. The turboprop has been designed to cater to routes that are as thin as the ATR’s, but longer than what the ATR s suited to fly. And that the USP of the Q400 is its speed.
The difference between the games of the Q400s and ATR72s? The Q400 focuses on maximising revenuepotential, while the ATR72 focuses on minimising costs. Those aren’t the same variety of apples to compare.
Simply put, the management wasn’t ready for the Q400.
The Q400s, today
As of today, 13 of the 14 Q400s in the airline’s fleet are active, with the 14th expected to join soon. Effective 16th July, these 13 Q400s will operate 116 flights a day, operating for a total of 149:20 hours each day, and deploying a capacity of 9048 seats on the network, daily.
Each Q400 flies on average almost 9 flights a day, and is utilised to just a minute short of 11:30 hrs per day, per aircraft. A year ago, the utilisation was at 10:20 hrs.
Of the 116 departures, the airline flies 76 routes (where the onward and the return are treated separately) between 38 city pairs. This is on average a frequency of 1.5 on each route. The Q400s serve 28 destinations, resulting in an average of 1.3 city pairs from each destination.
Of the 38 city pairs, 10 are monopoly sectors. Of the 38 city pairs, 34 are exclusively operated by the Q400s by SpiceJet. Of the 28 destinations, 15 are exclusively Q400 destinations. Refer the diagram below.
The Q400 flies the longest turboprop sector in India, between Jabalpur and Mumbai. Sectors like this are what the Q400 are better suited for: longer than those of an ATR, shorter than those suited for a jet. Monopoly sectors are in yellow. Nearly 90% of the city pairs are exclusively operated by the Q400 at SpiceJet.
Block times for the sectors do not necessarily match the distances. The sector block times, for the same sectors in the same order, are graphed below:
The most important stations for SpiceJet’s Q400s are, in order of departures, Hyderabad, Chennai, Delhi and Bangalore. Bangalore, despite being a hub, is not a base for the Q400s.
Jabalpur is important to the airline. Q400s from Delhi are swapped with the Q400s from Hyderabad at Jabalpur, necessary for maintenance which is at Hyderabad. Q400s from Chennai swap with the Q400s at Hyderabad through the Goa flights.
53% of the stations served by the Q400 are exclusive Q400 stations for SpiceJet.
Of the above stations, Belgaum and Tuticorin are exclusively served by SpiceJet, and operated to by the Q400s. Belgaum and Tuticorin are examples of airports that are either operationally unfeasible or commercially unviable to operate using a 180 seat jet aircraft. Most of the Q400 sectors listed here are commercially unviable for a 180 seat jet (the market isn’t yet sufficiently big), and atleast 40% of the sectors are not advisable to deploy a jet on, due to short sector lengths.
Typically, a regional jet with similar seats offers better operating economics and greater productivity when sector distances exceed 250 – 300NM. Average sector length for SpiceJet’s Q400s is 260NM, which speaks well about the way in which the asset is being used. 53% of the 38 sectors are below the average of 260NM, and 74% of the 38 sectors are below 300NM.
Flying the Q400 faster to save fuel?
The Q400 can be flown in one of four speed schedules – Long Range Cruise (LRC), High Speed Cruise (HSC), Intermediate Cruise Speed (ISC – between HSC & LRC), and Maximum Cruise rating (MCR). When arranged in order of increasing speeds, this is LRC-ISC-HSC-MCR.
Among 16 techniques in which an operator may realise fuel savings, optimisation of cruise speeds realises the largest potential gain. The Specific Air Range (SAR) curve below shows the distance travelled per pound of fuel. Higher the SAR, the longer the distance that the Q400 can cover for the same quantity of fuel.
While LRC (red line) would be the choice of speed for any operator who considers only fuel costs, SpiceJet used to operate its aircraft at ISC (purple line). This burnt more fuel, but saved time, which results in reduced time-related costs, and higher productivity.
Of late, SpiceJet has been flying its Q400s at HSC, for flights of around 1 hr in flight time (not block time). This translates to flights of sector distances of 300NM and below, which are 74% of all sectors flown by the Q400s at SpiceJet. Flying at HSC should, according to tables, burn more fuel, but pilots do report savings of around 150Kgs of fuel per sector. 150Kgs of fuel saved is around 14% of the trip fuel for a one hour flight time sector, which is a significant amount.
Such high fuel saving percentages with an increase in speed is not possible. The only explanation could be a host of other procedures that have been implemented that impact the overall fuel consumption. Better routing to take advantage of winds can have significant impact on fuel burns. Optimisation of weights, climb and descent profiles, improvised taxi procedures and approaches, use of detailed performance tables, and better APU management are some of the ways which fuel burn can be reduced.
The Q400 is an aircraft that must be used as a high speed aircraft that serves as a compromise between jet-like speeds and turboprop economy. Pushing the airplane to perform to either extreme is a significant deviation from the intended purpose of the aircraft, which leads to inappropriate and poor asset utilization.
Asset utilization seems to be on the increase. The Q400 is deployed on those routes on which a 180 seat jet cannot operate, thereby allowing SpiceJet to grow its roots into untapped markets to feed traffic to the mainline network. It is a gap filler. With more flights a day, the aircraft is being flown to its revenue generating potential. The networks of the two fleets – jet and turboprop are being aligned to cater to a hub and spoke model. However, a good narrow-body jet fleet size is required to allow the airline to make the most of the connectivity offered by its turboprop fleet.
One of AirAsia India’s aircraft utilisation has increased to one of the highest in the country.
1 millionth passenger expected to be flown around August 5th.
Typical turn around time: 25 -30 minutes.
The airline, which started operations one year ago on June 12th, 2014, now operates a fleet of 5 aircraft from 2 hubs – Bangalore and Delhi. All of the airline’s present flights from Delhi are no less than 2 hours 20 minutes long. Such long flights ensure that the airplanes spend a larger fraction of the flight in air, resulting in higher aircraft utilisation.
One of the airline’s 5 aircraft rotations flies only 2:30hr flights. This rotation covers a Delhi-Bangalore return, and two Delhi-Goa returns. Together, the utilisation on this pattern totals to 15:10 hrs, which is 50 minutes short of the target that the airline had made public, but one of the highest in the country for all domestic operations.
Average utilisation is however at 12:19 hrs, and the minimum utilisation is 11:00hrs. The average turn-around time at the airline is 36 minutes, a figure that is 16 minutes higher than the target of 20 minutes. However, turn around periods of 25 minutes and 30 minutes account for 70% of all turnarounds. There are no turnarounds of 20 minutes. Refer graph below.
The airline recently added Imphal as a destination, raising the number of destinations to 10. The airline today flies 32 flights a day, deploying 5,760 seats a day and flying around 4,500 passengers daily. Till end May 2015, the airline had flown 716,000 passengers. The airline may fly its 1 millionth passenger on or around the 5th of August 2015.
The airline may add a third Cochin flight in the morning, to provide a well spread out thrice daily service to Cochin from Bangalore. When added, all airplanes will be flying at near maximum utilisation in their rotations. No further growth is possible with the existing fleet.
Aircraft between hubs may be swapped through the night flight I52227 DEL-BLR and I52228 BLR-DEL. Two rotations sync up at the right times to allow for a swap. Until a third Cochin is launched, the airline may use the morning flight I52221 DEL-BLR to swap airplanes.
Ideally, considering that Delhi base has higher aircraft utilisation, the airline may realise a higher fuel saving by deploying two winglet-equipped aircraft at Delhi rather than just one as is the case today. Winglets help realise greater savings on longer flights.
According to the AirAsia Group, AirAsia India, “Overall performance was better than expected with strong loads but is working on keeping costs under check.”
10 year old SpiceJet’s performance in Q4 FY’15 has been promising. SpiceJet as an airline has been promising in certain quarters, profitable in some others, and disappointing in many. One problem that has plagued the airline is impatience. The constant change of top management results in one, big problem: insufficient time for any strategy to bear fruits, no matter how brilliant.
That is because any strategy has a trial and error phase – essential to coarse and fine tune the strategy to the environment – both internal and external to the airline.
In Q4’FY15, SpiceJet changed hands, yet again. The Marans are out, and Ajay Singh is back in. In the quarter, the aircraft lost a Q400 to an accident at Hubli. Active fleet size was down to 17 Boeing 737s and 13 Q400s – a total of 30 airplanes, down 50% from the days of 57.
Things got so complicated at the airline that the one element required to run an airline was missing – Simplicity.
The circumstances surrounding the airline, and the situation it was in Q4’FY15 was very different from what was in Q4’FY14. Yet, comparison is worthy to put things in perspective.
Q4’FY15 saw SpiceJet as a shrunk airline – lesser routes, smaller fleet, lesser departures. The number of flights were lower by 43%, to an average 179 a day from 312 in Q4’FY14. Load factor difference was a positive by 13% – which meant the airline carried more passengers per flight, on average. This had two effects – the number of passengers carried was down only 37% despite 43% lesser flights. This also affected the cargo uplift, which was down 8% due to lesser free cargo space available. The average flight length was 752 km – down 9% from 826km. Capacity was down 52%.
SpiceJet is yet to stabilise its operations. An airline has two aims: safe and convenient flights for passengers, and value for shareholders. Part of convenience are frequency and on time performance, with the latter more important.
SpiceJet’s on time performance isn’t one of the best, and that is something that the airline needs to, and perhaps is, working on. SpiceJet has had the highest number of cancellations among all airlines in the month of January and March, and the second highest among established airlines in the month fo February. Stabilisation of such operational parameters is key to SpiceJet becoming a preferred airline.
Down to the rupee
Unit revenues speak volumes about an airline’s efficiency.
We look only into Income from operations (Net sales), and ignore all other incomes, as this is the real measure of the airline’s core activity’s performance.
Q4’15 had a revenue of INR 4.15/seat-km (or per ASK= RASK), which is 3% higher than what was realised last year. This shows that the increase in load factors had a positive impact on unit revenues, thanks to the strategies employed by the former CCO Kaneswaran Avili and the VP Revenue Management Fares Kilpady. This also reflects network rationalisation.
When an airline shrinks, costs get complicated. There are certain costs that are hard to shrink, such as employee costs, as layoffs are subject to an airline’s culture. Employee costs per ASK shot up 63% to INR 0.57/seat-km. Further, staff salaries were upward revised after Q4’14.
Although the airline shrunk its fleet, it were the leased Boeing 737s that moved out, not the owned Q400s. Capacity dropped, but the depreciation and amortisation costs associated with the aircraft didn’t. This resulted in the associated costs rising by 48% to INR 0.16/seat-km.
Airport charges went up by 18%, in part due to the reduced flight lengths, which means the airline had more take off and landings for the same capacity. This may have also negatively impacted aircraft maintenance. Spares pool policy may have also had an impact. If an aircraft went for a C-check in this period, costs may have been impacted too. Maintenance costs per ASK went up 3%.
Other operating costs went up 17% to INR 0.16/seat-km.
Other expenses, which includes administrative expenses went down by 5%.
Lease rentals per unit went down 18% to INR 0.61/seat-km, owing to higher utilisation of aircraft which diluted this fixed cost.
Aircraft fuel costs went down 31% to INR 1.52/seat-km largely due to the fall of ATF prices.
Fuel, Maintenance, Staff, Lease and amortisation (as Q400s are owned, and is the equivalent of lease costs) and other operating expenses form a chunk of the expenses, and these 5 together account for 92% of expenses. These costs together went down by 12% to INR 3.62/seat-km in Q4’15 against INR 4.13/seat-km in Q4’14.
Redelivery expenses are one-off expenses and went up 626% to INR 0.35/seat-km. Other expenses are arguably not part of the operating expense consideration set.
With this, the operational cost per available seat kilometre (which excludes one-off redelivery costs and administrative ‘other expenses’) is INR 3.98/seat-km, which is 10% lower than the INR 4.44/seat-km in Q4’14.
With an operational RASK of INR 4.15/seat-km, and an arguable operational CASK of INR 3.98/seat-km, the airline was arguably operationally profitable by INR 0.16/seat-km.
Core operating costs and revenues are stressed upon as this is a reflection of the performance and efficiency of an airline’s core activity. However, an airline will need to be efficient throughout the structure. SpiceJet realised a loss of INR 102 Cr due to the total operating RASK and total operating CASK amounting to INR 4.15/seat-km and INR 4.71/seat-km, respectively.
Extraordinary Income and bottom line
Insurance companies paid INR 161 Cr for the Q400 that was written off after an accident at Hubli, Karnataka. SpiceJet received INR 61 Cr. This, along with other income of 91 Cr added INR 153 Cr to the books. Finance costs drained INR 28 Cr. Overall operating loss drained INR 102 Cr.
The airline realised a net profit of INR 22 Cr, and the insurance pay off was responsible for the tip over into the black.
Comparison with AirAsia India
While a comparison between a small start-up airline and a larger, older airline is fair to neither airline, a comparison will help show what’s possible.
Unit costs (per seat-km) of staff is leaner at SpiceJet as it is a larger airline, however, this can fall further. SpiceJet cannot escape amortisation & depreciation costs as Q400s are owned, while AirAsia only leases airplanes. Fuel expenses per ASK are higher at SpiceJet due to the higher fuel burn per ASK of the Q400, the possibility of higher burns due to ATC congestion at metros, and higher load factors.
All of AirAsia’s airplanes in Q4 were new, and almost fresh out of maintenance when delivered, needing hardly any maintenance. Such may not have been the case at SpiceJet, which could have taken up the maintenance cost up.
User charges are higher at SpiceJet as AirAsia India does enjoy certain benefits from Bangalore airport – the only airport it used to fly into in Q4. SpiceJet flew into all metros.
Aircraft operating lease expenses appear lower at SpiceJet as of the 30 aircraft in the fleet, only 17 were leased. Q400’s lease costs do not figure in the lease expenses.
Other operating expenses are lower at SpiceJet due to a larger fleet diluting costs. However, ‘other operating costs’ for SpiceJet may not be the same as AirAsia India’s.
Where SpiceJet can trim its cost are in the ‘other expenses’. However, AirAsia India has lower administrative costs as many resources are shared with the AirAsia Group.
The cost structure (see pie charts) of both airlines show the cost structure for both airlines. Generally, a cost structure which has a larger share of fuel cost indicates a leaner structure.
A chance to renew
What the management did in FY 2014-2015 to SpiceJet has been impressive – revenue management and market stimulation has resulted in a positive impact on unit revenues even with higher load factors and promotional fares. Such practice, if continued, may benefit the airline in the current fiscal.
The airline scaled up its fleet in Q1’16 temporarily through the wet-lease of 3 Boeing 737s. Unverified information point to 2 additional Q400s joining the fleet, and an active evaluation of wet-leasing Airbus A320 aircraft. Whatever the aircraft type, and however questionable it may be, the airline is going to, and needs to increase its fleet size.
SpiceJet has another opportunity to keep the system lean as it regrows. Good contracts, scaling up and high asset utilisation will reduce fixed costs. Good market study, prudent and well researched network growth, leveraging the benefits of the Q400 to do what the market leader cannot, and differentiation of in-flight services can allow SpiceJet to realise good unit revenues even in the light of competition.
Revenues aren’t much of a problem at SpiceJet, but can be bettered through better core service – frequency and on time performance. Costs are the biggest problem in the airline, and will need to be trimmed down significantly.
SpiceJet has what it takes to grow to an extent that allows it to compete non-head-on and healthily with the market leader. Focus on basics and differentiation are key.
AirAsia 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.
In 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.
AirAsia 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.
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.
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).