COVID-19: Air India to incur ₹30-35 cr loss per day following suspension of operations

Air India, 100% stake, government, 76% stake, disinvestment, losses, cash crunch, Air India Express, Air India SATS Airport Services Ltd
In 2018, the government had offered to sell its 76 per cent stake in the Air India airline.

Flag carrier Air India is expected to incur losses to the tune of ₹30-35 crore per day following the suspension of operations in the wake of coronavirus pandemic, according to a source.

With stringent border controls across the countries to restrict movement of people, many countries have barred international flights in their territory amid COVID-19. India has also announced a temporary ban on flying.

“We will not be operating a single commercial flight along with other domestic carriers as per the governments order, yet our daily losses will still be in the range of ₹30-35 crore. Though there will not be certain costs such as fuel, ground handling, airport fee during the suspension of oprations, we still will have to make payments towards salaries and allowances, lease rentals, mimimum maintenance, besides the interest payment, among others,” the source told PTI.

Air India’s total earnings per day are around ₹60-65 crore and 90 per cent of this comes from passenger revenue, he said adding, “the expenses too are in the same range. So we are earnings before interest, taxes, depreciation, and amortization (EBITDA) positive or in a way meeting our all expenses.”

Air India’s salary bill stands at around ₹250 crore per month while the aircraft lease rentals outgo is around USD 30 million per month as per the source. The airline has 21 Boeing B787-800s on lease in addition to 27 Airbus A320Neo planes. The lease rental for each Boeing 787 is USD 1 million per months and USD 400 per month for an A20Neo, as per the source. Besides, the airline has to make as much as ₹225 crore per months towards interest on borrowings among others.

Get breaking news and latest updates from India
and around the world on thefederal.com
FOLLOW US: