Tata’s acquisition of Air India in January 2022 marked a significant change for the airline. In its first full fiscal year under Tata ownership, FY23, the airline reported a loss of ₹11,381 crore, up 18.6 per cent from the previous fiscal year, FY22, which had a loss of ₹9,591 crore after accounting for write-offs and exceptional items.
Its revenues from operations doubled to ₹31,377 crore in FY23 from ₹16,763 crore the same time last year.
The company’s total expenses for the fiscal year ending on March 31, 2023, increased by approximately 40.3 per cent, reaching ₹37,111 crore, up from ₹26,346 crore. This increase was driven by various factors, including significant exceptional items. The airline has committed expenses to refurbishment and induction of aircraft, upgrading technology and adding more employees among others.
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Under the profit and loss statement, the company detailed exceptional items amounting to ₹6,610 crore in FY23, an increase from ₹2,500 crore the previous year. These exceptional items contributed to the overall expenses
Additionally, the financial figures included ‘impairment of assets’, totaling over ₹5,100 crore, and a provision for diminution in the value of assets (aircraft and engines) ‘held for sale’ amounting to ₹1,041 crore.
The introduction of a Voluntary Retirement Scheme (VRS) also incurred an estimated cost of ₹465 crore, recognised as an exceptional item in the profit and loss statement. This VRS was offered to over 3,500 employees as part of the company’s efforts to streamline its workforce. These factors, along with the exceptional items, played a role in the increased expenses for the fiscal year, it said.
Tata Group acquired Air India in January 2022 with a winning bid of ₹18,000 crore, surpassing the ₹12,906 crore reserve price. The airline’s significant debt of ₹61,562 crore as of August 31, 2021, was divided, with Tata taking ₹15,300 crore, and the remainder transferred to AI Asset Holding Ltd (AIAHL), amounting to around ₹46,000 crore.
From a commercial standpoint, the airline saw substantial growth in key metrics. Available Seat Kilometer (ASKM) rose to 60,900 million in FY23, a remarkable 90 per cent increase from 37,352 million in the prior year. Revenue Passenger Kilometer (RPKM) also doubled, reaching ₹5,046 crore from ₹2,622 crore.
Under the overview, the company stated that the easing of Covid-19 travel restrictions in 2022 led to a resurgence in air travel, with global passenger demand not expected to fully return to pre-Covid-19 levels until 2024. In India, there was a 23 per cent growth in performance compared to FY20 (pre-Covid), with the passenger load factor increasing from 73.5 per cent in FY22 to 81.9 per cent in FY23. The airline carried over 1.85 crore passengers in FY23, a significant increase from 1.15 crore passengers in the previous year.
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In terms of revenue, Air India achieved its highest monthly passenger revenue ever recorded in December 2022, surpassing ₹3,000 crore. Overall, there was an increase in passenger revenue by ₹5,542 crore compared to FY20, and cargo revenue saw an increase of ₹632 crore compared to FY20, a 37 per cent increase.
The airline’s freight operations also saw a notable increase in revenue, with revenues nearly doubling to ₹585 crore from ₹321 crore in the corresponding year. Air India carried 1,75,212 tonnes of freight in FY23, compared to 1,69,736 tonnes in FY22.
Ancillary revenue increased by ₹382 crore compared to FY20, despite a 19 per cent reduction in the number of passengers.
Informing its stakeholders, Air India said that to improve its performance further, the company took several initiatives, including adding new domestic and international routes and signing contracts for refurbishing existing wide-body aircraft. Tata-owned Air India also executed an order book for 400 Firm Narrow-body and 70 Firm Wide-body aircraft and signed lease agreements for 11 Wide-body and 25 Narrow-body aircraft for deliveries before April 2024.