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Rediff.com  » Business » 18 days, Rs 26-cr loss: That's AirAsia's India story!

18 days, Rs 26-cr loss: That's AirAsia's India story!

Last updated on: August 26, 2014 10:27 IST

AirAsia crewAirAsia has reported a net loss of 13.8 million Malaysian ringgit (about Rs 26 crore) for its Indian joint venture operations for the quarter ended June.

The losses are primarily because the venture operated only for 18 days in June, with only two flights.

For the quarter ended June, Jet Airways and SpiceJet posted losses of Rs 217 crore (Rs 2.17 billion) and Rs 124 crore (Rs 1.24 billion), respectively.

AirAsia India, a joint venture of Malaysian low-cost airline AirAsia, the Tata group and Telestra Tradeplace, commenced operations with a Bangalore-Goa flight on June 12.

AirAsia India operates a single Airbus A320 plane; it has eight flights from Bangalore to Goa, Chennai and Kochi.

It is to start services to Jaipur and Chandigarh next month, after inducting its second aircraft.

The airline also plans to fly to the Northeast and ramp up its fleet size to six by the end of this year.

Announcing its entry into India, the airline unveiled a Rs 5 promotional fare on the Goa route, but IndiGo went one up with Rs 1 fares on the same route.

Also, rivals have added flights on AirAsia routes.

In June, AirAsia flights recorded 80 per cent occupancy; this fell to 69.8 in July.

AirAsia is known for one of the lowest unit costs.

AirAsia India chief executive Mittu Chandilya hopes the company will break-even by December.

While fuel and airport charges in India are higher than in other countries, AirAsia India will have a cost advantage, as it can rely on its parent for aircraft lease, maintenance support and training.

FLYING LOW

  • Poor occupancy: In June, occupancy on AirAsia flights was 80 per cent and it fell to 69.8 in July, a weak month for air travel
  • Others suffer too: Rivals Jet Airways and SpiceJet posted a loss of Rs 217 crore (Rs 2.17 billion) and Rs 124 crore (Rs 1.24 billion), respectively
BS Reporter in New Delhi
Source: