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Despite accident, Air India Express remains an attractive for bidders

The Centre, which announced its disinvestment plan, recently extended the deadline to submit an expression of interest for the airline till August 31.

Published: 23rd August 2020 09:06 PM  |   Last Updated: 24th August 2020 03:20 PM   |  A+A-

Air India Express flight

For representational purposes

By Express News Service

THIRUVANANTHAPURAM: Though the tragedy of August 7 dealt Air India Express (AIE) a blow, it has not clipped the wings of the profit-making low-budget airline by any account. Ever since posting a profit of Rs 362 crore in the 2015-16 fiscal with just 19 aircrafts, the company has been on an upward trajectory. Though the profit margin saw a decline, it was primarily due to the airline's decision to expand its fleet, which has reached 25 now -- 17 owned by AIE and eight on lease.

Since the aircraft involved in the crash was insured, it will not burn a big hole in AIE's coffer. "The only financial loss the company will have to endure in the immediate future is the sharp rise in insurance premium, apart from the loss caused by the privation of an aircraft from the fleet," said a source. The
operational loss too will not be as damaging with the weekly departures of the airline dropping close to 300 from 690 due to the pandemic. "Also, there will always be a standby aircraft as per standard operating procedure of the company," added the source.

The airline at present has a shortage of crew after 50-odd staffers contracted Covid-19 after handling evacuees under Vande Bharat Mission. AIE has around 1,500 employees for its 25 aircrafts, with 60 employees being allotted to each aircraft, which is the lowest in the industry. The commercial passenger load, which is 85 per cent, has not seen any major drop. It has also maintained its track record of 90 per cent on-time performance by conducting services even to Kozhikode soon after the accident.

So, despite the accident, AIE is an attractive lot for bidders who wish to buy the group. The Centre, which announced its disinvestment plan, recently extended the deadline to submit an expression of interest for the airline till August 31 due to the pandemic situation.



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