Air India: ₹7,000 Crore write-offs in FY23

However, despite these challenges, Air India managed to reduce its losses and achieve positive earnings before interest, taxes, depreciation, amortisation, and restructuring or rent costs (EBITDAR) at an operating level, the publication reported. LiveMint could not independently verify the report.

Air India, along with its subsidiary Air India Express, achieved EBITDAR positivity and neared breakeven after meeting lease rental obligations in the first year, sources familiar with the matter told ET. However, AirAsia India accounted for most of the losses, with the net loss for the year estimated to be slightly over ₹2,500 crore. This marks a significant improvement compared to the previous financial year when the airline reported a loss of ₹19,556 crore.

The write-offs were primarily attributed to Air India’s impaired aircraft and engines, with AirAsia Bhd, the former joint venture partner, assuming responsibility for the remaining losses incurred by AirAsia India. Despite the write-offs, Air India’s financials for the year ending in March were deemed healthy by executives. The new management has been focusing on operational efficiencies and cost savings, resulting in positive outcomes, the publication added.

AirAsia India accounted for an impairment cost of over ₹1,500 crore, while the faulty planes and engines of Air India contributed to an estimated ₹5,000 crore in write-offs.

The Competition Commission of India (CCI) has recently issued a show-cause notice to Air India, which questions the airline’s proposed merger with Vistara and seeks an explanation as to why an investigation should not be conducted. The Tata Group has reportedly been given a period of 30 days to respond to the CCI notice and obtain approval for the merger of its airlines without triggering an investigation.

Updated: 17 Jul 2023, 09:29 AM IST