5 Must Know Things about Air India’s
✈️ Write-off of Old Planes, Engines, and AirAsia India
Air India’s losses of 14000 crore in FY23 were due to significant write-offs, including old planes, engines, and AirAsia India investments.
✈️ Tata Group’s 13000 crore Investment in Air India
The Tata Group stepped in to support Air India with a substantial investment of 13000 crore.
✈️ Funding for 470 Aircraft Deal from Airbus and Boeing
Part of Tata’s investment went into funding a massive aircraft deal with Airbus and Boeing, comprising 470 new planes.
✈️ Improving On-Time Performance (OTP)
Post takeover, Air India is actively working on enhancing its on-time performance (OTP), a crucial metric for improvement.
✈️ Expansion Plans in Europe and North America
Air India is also looking to expand its operations in Europe and North America to strengthen its global presence.
Air India’s total accumulated losses at the end of FY23 are estimated to be around Rs 14,000 crore. These losses include write-offs on old aircraft and engines.
Tata Sons Investment
Tata Sons, through its wholly-owned subsidiary Talace, invested approximately Rs 13,000 crore in Air India during FY23. This investment excludes the amount committed for the purchase of 470 new aircraft from Airbus and Boeing in June. The investment was also used for a design revamp and improved services.
An estimated impairment cost of about Rs 5,000 crore is attributed to Air India’s aging planes and engines, and an additional Rs 1,500 crore against AirAsia India.
New Plane Orders
Industry sources indicate a total order value of approximately $30 billion for the new planes, with payments to be made over several years. Tata Sons Chairman N Chandrasekaran emphasized prioritizing customer centricity and safety over profit while aiming to reduce operational losses.
Air India management aims to undergo organizational transformation as Tata consolidates its aviation businesses. The plan includes merging Air India Express with AirAsia India to create a low-cost unit and merging Vistara with Air India to create a full-service airline. The company plans to retrain existing employees and hire new talent to support its growth ambitions.
Air India faces significant accumulated losses, but with Tata Sons’ investment and the upcoming organizational changes, the airline aims to navigate towards a more profitable and customer-centric future.