Air India's accumulated losses at FY23-end estimated at Rs 14,000 crore
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Air India's total accumulated losses at the end of the financial year 2022-23 (FY23) have been estimated at Rs 14,000 crore, According to a report by The Economic Times (ET). Sources were quoted as saying that Tata Sons invested about Rs 13,000 crore in Air India in FY23 through wholly owned subsidiary Talace.
The amount excludes the investment carved out for 470 new aircraft ordered in June from Airbus and Boeing. Tata gained ownership of Air India in January 2022 after the government privatised it.
The losses include write-offs on old planes and engines and those on account of AirAsia India. An impairment cost of Rs 1,500 crore is estimated against AirAsia India and about Rs 5,000 crore because of Air India's ageing engines and planes.
According to industry sources, the total order value of the new planes is close to $30 billion.
The airline has also undertaken a $400 million project to revamp existing aircraft, which will include refurbishing interiors.
Executives were quoted as saying that the airline's focus is on improving customer service, aircraft quality and operational efficiencies. Tata Sons chairman N Chandrasekaran's mandate is that customer centricity and safety should be prioritised. Chandrasekaran is also Air India's chairman.
As Air India will need a strong, skilled workforce to support its growth ambitions, the airline is also investing in retraining employees and hiring new talent, an executive was quoted as saying.
At the present moment, the new Air India management is working on an organisational overhaul. Air India Express is absorbing AirAsia India to create a low-cost unit. Vistara is being merged into Air India to create a full-service airline. Singapore Airlines will have a 25 per cent stake in the newly merged entity.
Executives stated that the airline's lease costs were higher last financial year since it got planes on short-term leases, which cost more than long-term ones.
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