Air India writes off Rs 7,000 crore but turns Ebitdar positive in FY23

Due to impairments caused by faulty aircraft and engines, as well as its low-cost airline AirAsia India, carrier Air India wrote off an estimated Rs 7,000 crore in the financial year 2022-23 (FY23), according to a report by the Economic Times (ET). However, the airline's losses decreased and it was Ebitdar (earnings before interest, taxes, depreciation, and amortisation and restructuring or rent costs) positive or, profitable at an operating level, according to executives.

A person was quoted as saying that the net loss was slightly over Rs 2,500 crore. This compares with a loss of Rs 9,556 crore in FY22, the person said. Air India and its former joint venture partner AirAsia Bhd shared the cost of writing off AirAsia India, with Air India accounting for a significant proportion of the write-off.

Air India's financials in the year ended March were healthy except for the write-offs, executives said. An impairment cost of more than Rs 1,500 crore is estimated against AirAsia India and around Rs 5,000 crore due to Air India's old planes and engines.

The Tata Group acquired Air India in January 2022 and is currently consolidating its aviation units by merging Air India Express with AirAsia India and Vistara with Air India.

An executive was quoted as saying that Air India needs to be restructured wholly and the amount of loss shows that the plan is yielding results.

Officials stated that a  positive Ebitdar means that the firm is profitable at an operating level, excluding expenses such as taxes, rent and restructuring costs. Air India has kept a steady focus on both costs as well as safety, they added.

In the financial year 2021-22 (FY22), the airline registered a net loss of Rs 9,556.5 crore on net revenue of Rs 19,815.9 crore. In FY21, it had posted a net loss of Rs 7,017.4 crore on revenue of Rs 12,104 crore. Revenue figures for FY23 weren't immediately available.