air india charters ltd Management discussions

1. AIR INDIA EXPRESS OPERATIONS Fleet Size

During FY 2019-20, Air India Express continued its operations with a fleet of 25 B 737-800 NG aircraft including 8 leased aircraft.

Operations

Air India Express commenced Summer Schedule 2019 with 649 departures per week which marginally increased to 651 weekly departures during Winter 2019.

Highlights of Schedule Changes in FY 2019-20

New Routes / additional flights introduced during the year:

Additional capacity was deployed at Kannur Airport, which had been commissioned in December 2018. During Summer 2019, additional capacity was deployed on following routes:

	Kannur-Muscat-Kannur	: 3 weekly flights
	Kannur-Bahrain-Kuwait-Kannur	: 2 weekly flights
	Surat - Sharjah - Surat	: Frequency increased from 2 to 4 weekly flights
	Kannur - Abu Dhabi/Kannur	: The frequency was increased from 3 to 5 weekly flights
	Kannur - Sharjah - Kannur	: Frequency increased from 4 to 7 weekly flights

During Winter 2019, the frequency of the Kannur - Doha - Kannur flights was increased from 4 to 5 weekly flights.

The route-wise breakup of the flights operated by the Airline in 2019-20 is given below:

Sr. No.	Sector	Frequency/ week
		Summer 2019	Winter 2019
1	India- Dubai	80	80
2	India- Abu Dhabi	37	37
3	India- Sharjah	55	55
4	India- Muscat	27	27
5	India- Dammam	7	7
6	India- Bahrain	7	7
7	India- Doha	25	26
8	India- Al Ain	2	2
Sr. No.	Sector	Frequency/ week
		Summer 2019	Winter 2019
9	India- Ras Al Khaimah	2	2
10	India- Salalah	2	2
11	India- Bahrain- Kuwait	5	5
12	India- Singapore	28	28
13	India- Riyadh	7	7
14	India- Kuwait	5	5
15	Domestic	12	12
Total		301	302

Online Stations

As on 31 March 2020 there were 20 online stations in India and 13 abroad:

India: Kozhikode, Kochi, Thiruvananthapuram, Kannur, Bengaluru, Mangaluru, Chennai, Tiruchirappalli, Vijayawada, Mumbai, Pune, Delhi, Amritsar, Lucknow, Chandigarh, Jaipur, Varanasi, Madurai, Coimbatore and Surat.

International: Dubai, Abu Dhabi, Sharjah, Ras-Al-Khaimah, Al Ain, Muscat, Salalah, Bahrain, Doha, Kuwait, Dammam, Riyadh and Singapore.

Capacity offered, PLF, Yields and Revenues

The Airline continued to improve the aircraft utilization. In FY 2019-20, daily average aircraft utilization went up from 13.3 hours recorded in 2018-19 to 13.4 hours per day per aircraft with a fleet of 25 aircraft taking the total block hours to 1,22,260.

The capacity offered by the Airline in terms of ASK in FY 2019-20 grew by 6% from 14,173 Million in FY 2018-19 to 14,982 Million. On the strength of increase in Passenger Load Factor that went up from 79.6% in FY 2018-19 to 83.5%, Air India Express recorded a much higher growth of 11% in RPK. The RPK in FY 2019-20 increased to 12,512 Million from 11,277 Million achieved in FY 2018-19. Despite disruption to services beginning from about the first week of March 2020 due to the outbreak of COVID-19, the number of passengers carried by the Airline rose by 11% going up from 4.36 Million in FY 2018-19 to 4.84 Million in FY 2019-20.

The Airlines Operating Revenue grew by 25.12 % from Rs. 4172 Crore to Rs. 5219 Crore. The Yield per RPKM has increased by 12 % from Rs. 3.57 to Rs. 3.99 while Revenue per ASKM also increased by 17% from Rs. 2.84 in FY 2018-19 to Rs.3.34 achieved in FY 2019-20.

On Time Performance

The On Time Performance (OTP) achieved in FY 2019-20 was 78% while the schedule reliability was 98.4%

Aircraft Dispatch Reliability

The aircraft dispatch reliability for FY 2019-20 was 98.68 %.

Code Sharing with Air India

The Code Sharing arrangement between Air India and Air India Express continued in FY 2019-20 and included the following sectors:

a) Mumbai - Doha - Mumbai

b) Delhi - Abu Dhabi - Delhi

c) Coimbatore - Singapore - Coimbatore

d) Delhi - Madurai - Delhi

e) Delhi - Coimbatore - Delhi

f) Mumbai - Vijayawada - Mumbai

2. FUTURE OUTLOOK

To revive the economy and commence air traffic activities, the Governments is working on resuming air connectivity in a strategic manner. The Government of India introduced the Vande Bharat Mission on 07 May 2020, to repatriate stranded Indians across the globe back to the country. Air India and Air India Express were the main airlines that operated these flights initially. Air India Express operated 1548 international flights between 07 May and 30 September 2020 under the Vande Bharat mission and the Air Transport Bubble arrangements with other countries and carried 3.45 Lakh passengers between the Middle East/ South East Asia and India.

The Airlines are following all safety measures and guidelines issued by Ministry of Health and Family Welfare and the Ministry of Civil Aviation in this regard to provide a safer travel experience to passengers.

Airlines and Airports around the world are upgrading and realigning their passenger and baggage processing systems in keeping with the focus on health and safety of passengers and staff.

As close to about 15 million Indians are residents of the countries that represent the key overseas markets of the company and they share very close ties with their families in India, it is expected that revival of demand in these markets could begin to recover before the others. From the economic view point, the Indians resident in these countries contribute significantly by way of foreign inward remittances to India and by way of being the most economical / competent work force to the countries where they are employed. As such the gloomy forecast of IATA for recovery of global air travel may not be quite exactly applicable to the markets served by the Company which is constituted largely by Indian Expats; VFR and Leisure segments.

3. GOING CONCERN

The various measures taken by the Company towards improving operational efficiency especially in all key areas notably in the area of asset utilization have helped to improve the Airlines financial position. The Airlines strategy of keeping the unit costs lower than any of its competitors and focusing on serving niche markets has seen the Airline chalk up net profits consistently over the past 5 years. The net profit achieved in FY 2019-20 was the highest ever net profit that the Airline has earned. The Airlines core markets account for about 40% of the total traffic to / from India. There are many more such niche markets which the Airline can expand its operations to that are within the range and capability of the Airlines resources. As the Airlines current / potential markets are in fact home and place of work to

many millions of Indians, and the main reason for travel on these routes are predominantly compelling,

personal ones, it can be expected that the disruption in air travel brought out by the COVID pandemic

would have the shortest impact on the Airlines core routes.

4. HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The staff strength as on 31 March 2020 was 1451.

Staff strength of 1451 includes 10 employees (Pilots and Ground Staff) on deputation from the holding

Company, Air India Limited.

As on 31 March 2020 there was one employee with disabilities, in the services of the Company.

Relations with the work force continued to be cordial during the financial year 2019-20.

HR Initiatives during the year 2019-20

• Group Medical/ Health Insurance policy for Air India Express Ltd. employees was renewed from February, 2020 for 1 year.

• Under Swachh Bharat Scheme, action plan was initiated to upkeep cleanliness of premises and office.

• Under Swachh Bharat Scheme, Air India Express staff in association with NSS Youth Volunteers from Maharajas College, Ernakulam had undertaken cleaning drive of Roads/Area adjoining to CMFRI & High Court at Kochi on September 28, 2019 in liaison with Municipal Corporation of Kochi.

• In respect of COVID-19, necessary protective items like masks, gloves and hand sanitizers were provided to staff employed at various offices.

• In respect of COVID-19 paid leaves were sanctioned for all quarantined employees.

• In view of Lockdown due to COVID-19, facility of work from home is provided to key employees with access to ERP systems to enable them to be productive.

5. INFORMATION TECHNOLOGY

Major achievements during the year

• IT setup for Flight Operations Control Centre (OCC) done successfully.

• WQAR Server Configuration for Flight safety and Engineering at Mumbai and Trivandrum Data Centre respectively.

• SAP - ATF Invoice Data Integration project completed.

• SAP - On board sale integration and kitting for drystores and other catering items at BOM and COK done successfully.

• Configured Work from Home VPN facility for Finance and HR team due to COVID situation in the last week of March 2020.

• Implementation of DFDR flight data upload facility for all station in Server located at AIXL TRV data

Centre. Engineering teams can upload data remotely from their respective stations. Data is stored centrally in TRV Data Centre.

6. RISK MITIGATION STRATEGIES

The Company continuously monitors the risk perceptions and takes preventive action for mitigation of risks on various fronts.

7. INTERNAL CONTROL SYSTEMS

The Company has appointed M/s ARKS & Associates as Internal and Concurrent auditors for the year 2019-20 to carry out various internal audit assignments and special reviews such as compliance of accounting standards, CENVAT credit, Inventory accounting etc.