Air India accumulated losses at FY23-end pegged at Rs 14,000 crore
Tata Sons, the group holding company, invested an estimated ₹13,000 crore in Air India in FY23 through wholly owned subsidiary Talace, they added. This excludes the investment committed for 470 new aircraft ordered in June from Airbus and Boeing as the new owner embarks on the national carrier's transformation, which includes fleet renewal, a design refresh and upgraded services to compete with the likes of Emirates and Qatar Airways. Tata took over Air India in January 2022 after it was privatised.
The accumulated losses include write-offs on old planes and engines besides those on account of AirAsia India. An impairment cost upward of ₹1,500 crore is estimated against AirAsia India and about ₹5,000 crore due to Air India's ageing planes and engines. The total order value of the new planes, according to industry sources, is close to $30 billion.
Payment will be made in parts over the years. In June, the airline made pre-delivery payments (PDPs) to Boeing for 220 aircraft. PDPs are instalments that an airline has to pay the manufacturer when the aircraft are being built.
It can amount to about 30% of the price of the aircraft. The airline has undertaken a $400 million project to refurbish and revamp existing aircraft, which will include ripping out their decrepit interiors. Sources said that around half of that has already been deployed.
Air India did not comment. Top executives close to the matter said that while the focus is to cut operational losses through technology-led efficiencies, Tata Sons chairman N Chandrasekaran's mandate is that customer centricity and safety should be prioritised over profit. Chandrasekaran is also Air India chairman.
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