airline had posted a net profit of Rs 296.7 crore in fiscal 2017.
This is the third consecutive profitable year for the airline, the airline said in a statement Friday.
Despite the adverse market conditions, revenue increased to Rs 3,648 crore in the reporting year, a growth of 8.7 percent from Rs 3,335 crore in fiscal 2017, it said.
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"Net profit earned in fiscal 2018 is particularly significant as the aviation sector had to face many challenges, including high fuel cost. Added to this was the sluggishness in the Gulf economies where 90 percent of our capacities are deployed," Air India Express chief executive K Shyam Sundar was quoted as saying in the statement.
The unit cost has increased during the reporting period due to steady increase in fuel prices, which went up 20 per cent on average during the year from the year-ago period, Sundar explained.
However, prudent commercial and management interventions, including better utilisation of the assets, contributed to the positive financial outcome, he said.
The airline carried 13.7 percent more passengers during the year at 3.89 million from 3.42 million in the previous fiscal year.
Also, the average daily aircraft utilisation levels rose to 12.7 hrs from 12.2 hrs in the previous year, he said, adding the airline expanded its network to Madurai, Coimbatore and Vijayawada during the year.
With a fleet of 24 Boeing 737-800s, Air India Express flies to 13 international and 18 domestic routes.