Tata is now looking at amalgamating all airline subsidiaries under one name – Air India
The renowned portfolio of airlines under the Tata Group’s banner, comprising Air India, Air India Express, AirAsia India, and Vistara, has encountered a significant financial setback in FY 23. The conglomerate has witnessed a considerable loss amounting to a staggering Rs. 15,532 crores this financial year, surpassing the financial loss experienced in the preceding FY-22.
Tata Group, made a bold move in 2022 by acquiring Air India at a valuation of Rs. 18,000 crores. However, their airlines have not gained much profit. The group has endured two consecutive years of financial challenges, as evidenced by the continuous loss reports. In view of navigating these financial issues, Tata is now looking at amalgamating all airline subsidiaries under one name – Air India. The group fully owns the airlines Air India, Air India Express, and AirAsia India. Additionally, Vistara is a joint venture with Tata SIA and sees Tata Group holding a 51% stake, and the remaining 49% being owned by Singapore Airlines Limited (SIA).
According to recent reports, the cumulative financial toll on Air India’s balance sheet stands at Rs. 14,000 crores. This encompasses a substantial impairment cost of around Rs. 5,000 crores, which has been allocated for rectifying issues with Air India’s aircraft and engines. In tandem with this, an additional Rs. 1,500 crores were disbursed in support of AirAsia India. An additional amount has been spent for the order of new planes, adding to the total value.
Although AirAsia India and Vistara have both struggled financially, there is a reason for optimism as both carriers prepare to merge with Air India and Air India Express, entering a new stage of development. The merger not only aims to foster operational synergies but also holds the promise of reshaping their financial journey.
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