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HomeEntertainmentAir India writes off Rs 7,000 crore in FY23, turns Ebitdar Positive.

Air India writes off Rs 7,000 crore in FY23, turns Ebitdar Positive.

According to people with knowledge of the situation, Tata-owned Air India wrote off an estimated 7,000 crore in FY23 as part of impairments resulting from the carrier’s defective aircraft and engines as well as low-cost airline AirAsia India. Executives reported that losses decreased and that the carrier was running profitably as measured by ebitdar, or earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs.

According to an executive with knowledge of the situation, the net loss was estimated to be just under 2,500 crores. “The airline (Air India), along with its subsidiary Air India Express, was ebitdar positive in FY23 and near breakeven after paying lease rentals in the first year,” they added. According to the source, this contrasts with a loss of $9,556 crore in FY22.

According to them, Air India contributed significantly to the write-off for AirAsia India and erstwhile joint venture partner AirAsia Bhd covered the remainder.

Despite the write-offs, executives claimed Air India’s financials for the fiscal year that ended in March were strong since the new management places a strong emphasis on operational effectiveness and cost reduction. According to estimates, AirAsia India’s impairment cost might reach 1,500 crore, while Air India’s outdated aircraft and engines could cost up to 5,000 crore. After privatization, the Tata Group acquired ownership of Air India in January 2022.

Also read, Jayshree V Ullal: Indian-Origin Woman Surpasses Billionaires’ Net Worth

Why a Positive Ebitdar was required for Air India?

The organization is in the process of combining its aviation divisions. Both Air India Express and Vistara will become a part of AirAsia India. According to officials, a positive ebitdar indicates that the business is operating profitably after subtracting charges like taxes, rent, and restructuring costs.

Inquiries were not answered by the company.

Top officials claimed that the airline has consistently prioritized prices as well as safety, both of which are of the utmost significance. The CEO said, “Many aircraft will be auctioned off or junked, keeping the safety aspect as the top focus.” “Things may not always be visible from the ground, but Air India is focused on modernizing its systems and aircraft and will not compromise on safety, even as we reduce costs through tech-driven modernization,” the airline said. For a number of its grounded aircraft, the company pays lease rentals without making any money. The airline has allocated $400 million for aircraft restoration and upkeep.

On a standalone basis, the airline reported a net loss of 9,556.5 crore on net sales of 19,815.9 crore in FY22. On revenues of $12,104 crore, it reported a net loss of 7,017.4 crore for FY21.

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