Alliance Air has made a loss of around ₹535 crore in the first ten months of FY 2025 with a grounding of half its fleet, the civil aviation ministry informed Rajya Sabha on Monday.
Between FY22 and FY24, the airline posted a loss of ₹1,633 crore. The financial result for the ongoing financial year is provisional.
Alliance Air was a subsidiary of Air India before its privatisation in 2022. It remains a government-owned company.
Alliance Air has 21 aircraft (20 ATRs and one Dornier Dornier). Ten of these are operational as of now, and others are awaiting repair due to a supply chain issue, Minister of State for Civil Murlidhar Mohol informed Rajya Sabha in a written reply.
According to aviation analytics firm Cirium, Alliance Air operated 78 daily flights in March, which is 23 per cent lower than last year.
A reduction in revenue, maintenance expenses, and finance costs is contributing to the airline’s loss. Last year, the government infused ₹600 crore in equity, which was used to pay lessors, oil companies, and other vendors. While this helped to clear part of the backlog, the airline still owes money to maintenance repair and overhaul shops.
According to a media report, the government is planning to hold roadshows in May to gauge investor interest in a stake sale in Alliance Air and other former Air India subsidiaries engaged in ground handling, MRO, etc. Asked about this, a senior official said the next steps will be discussed with the Department of Investment and Public Asset Management (DIPAM).
“We are in constant discussion with original equipment manufacturers and MROs. The civil aviation ministry is supporting us. We are using internal accruals for repairs and we have overhauled three engines in the last few months. We will overhaul two more engines by April. We plan to have an operating fleet of 15 aircraft in September,” said the airline’s CEO, Rambabu CH.