‘Air Asia India is looking to be EBIT positive by end of 2019’

Ashwini Phadnis New Delhi | Updated on January 09, 2018

Amar Abrol, MD and CEO of Air Asia India

Airline to induct 8-10 aircraft a year, increase number of routes: MD and CEO

In the 20 months that Amar Abrol has been the MD and CEO of Air Asia India, the new management team has turned around the airline’s fortunes to get a domestic market share of 4.1 per cent in November-December this year. The airline is also all set to go international. In an exclusive interview with BusinessLine, Abrol outlined Air Asia India’s plans. Excerpts:

What is your aircraft induction in 2018 and 2019?

In 2018 it is to get to 21 (aircraft). Then, largely, we will get 8-10 aircraft a year depending on how the company performs. All crew will be trained to fly over water, all captains (will have) certification for international flights.

So, from the ease of operations point of view, I don’t think we are going to distinguish between people operating in India and abroad.

Air Asia India will look to induct 8-10 aircraft annually for how many years?

For the next four-five years, 60 to 70 aircraft is what we are looking at. But I am not saying that Air Asia India is going to stop after that.

The aircraft will all be single-aisle and no wide-body?

As of now no wide-body.At least for the next two years we are focussed on getting back into profit. All things being equal, like fuel prices and operational efficiency, we are looking at 2019-end to become EBIT positive.

What are the airline’s plans for the domestic market?

The 14th aircraft landed on December 8 and it goes operational on December 23.

It will operate on existing routes out of Bengaluru by increasing frequency to Jaipur and Hyderabad among others.

Is the airline on track to operate 29 domestic routes by the end of this year?

Largely on track. We will get to 21 aircraft by the end of 2018. There is no let-up on domestic (operations).

Everybody including shareholders have been pleasantly surprised that we are doing well in domestic.

We have a market share of 4.1 per cent in November going into December. Basically we are utilising our aircraft effectively.

How do you do that?

When we have 13 planes we are effectively and virtually flying 14 aircraft. We are utilising our aircraft between 14 and 14.5 hours a day.

What do you do when you have an aircraft on ground situation?

We manage right now. We have got a spare engine .

One spare engine for 14 aircraft?

Right now we are managing. We will look at adding a spare aircraft in the near future.

What do you mean?

If I say we are a 20 aircraft fleet we will technically be a 21 aircraft fleet. One will only fly half a day and willbe available for contingencies.

Is that not an expensive proposition?

That is how it works in the industry. It depends on when companies decide to have spare aircraft. It does not mean it is completelylying standing…it is just doing 50-60 per cent of what it is supposed to do.

Is the rising price of fuel a cause of concern? Are you passing it on to customers?

Over the long term, we, and I mean the entire group, are the barest on fuel. Fuel prices are not going to go that radically up over a long period of time.

What range do you expect oil to trade in?

We expect in the range of $58-68 over the course of a year or year and a half.

Have domestic air ticket prices gone up?

Right now not that much...partly we are passing it through partly we are not. We are launching so many new routes that when they are launched we obviously keep our fares low. Fuel has gone up by about 8-10 per cent on 45-50 per cent of our cost so the effective increase on profit and loss is anywhere between 3 an 5 per cent.

How have you managed to cut down losses?

The entire team has been very focussed. Aircraft utilisation is one thing. We do not have crew layover. Our security department is not a cost centre; we provide security services to all other airlines so they generate enough revenues to cover costs. Our customer care centre generates enough revenue to cover its costs.

We launched a campaign called zero wastage after Diwali so you only uplift so much food. All our flights are coming back with zero wastage.

Doesn’t so much flying put additional stress on the crew?

Yes, to some extent crew utilisation goes up which is a cost but at the margin that is not a significant cost. We balance the rotation of aircraft so that on one day one aircraft does a stipulated number of hours and the next day another. There is no compromise on the engineering or safety aspects.

Published on December 13, 2017

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