Airasia’s loss nearly doubles YOY in FY21

Airasia India’s loss nearly doubled to ~1,533 crore on a year-on-year (YOY) basis in FY21 while that of Vistara narrowed to ~1,612 crore during the same period, according to company filings. Air travel in FY21 was marred by Covid-19, which led to twomonth suspension of flights, grounding of fleet and losses. Domestic air traffic slipped to a seven-year low last year and recovery has been gradual.

Airasia India’s losses nearly doubled to ~1,533 crore on a year-on-year (YOY) basis in FY21 while that of Vistara narrowed to ~1,612 crore during the same period, according to company filings.

Air travel in FY21 was marred by Covid-19, which led to two-month suspension of flights, grounding of fleet and losses.

Domestic air traffic slipped to a seven-year low last year and recovery has been gradual due to state-wide restrictions and vaccination.

For the Tata group airlines, it was a year of mixed fortunes. While Vistara’s operating loss increased, its net loss reduced from ~1,814 crore in FY20 to ~1,612 crore in FY21 due to foreign exchange gains.

On the other hand, Airasia India’s net loss rose 95 per cent from ~782.30 crore to ~1,533 crore in the same period. Airasia India’s auditor has flagged risk about the company’s ability to continue as a going concern, in view of the complete erosion of net worth, following its FY21 result.

On the revenue side, Covid-19 disruption and phased increase in operations led to 63 per cent fall for Airasia. Its revenue declined to ~1,358.72 crore in FY21 from ~3,682.91 crore a year earlier. Vistara’s revenue dropped 52 per cent to ~2,243.49 crore in FY21 from ~4,738 crore in FY20.

Airasia India declined comment. A company source said that the widening of loss was due to redelivery expenses attached with return of seven Airbus A320 planes to Airasia Berhad in Malaysia.

He added that the expense was one off in nature and the return of planes has helped the company save costs. The company has instead preferred lower priced leases from third parties.

In its latest annual report, Airasia India said it has maintained focus on becoming the lowest cost airline in India. Non fuel-unit cost was 10 per cent lower than Indigo between April and December FY21, it said. The airline also improved its market share in cargo. Cargo revenue increased from ~67 crore to ~81 crore on a YOY basis. It came on top in on-time flight performance for three months and second for four months last year.

Both Airasia India and Vistara benefited from foreign exchange gains due to strengthening of the Indian rupee in FY 21.

In a statement, Vistara said it added new aircraft, expanded its network and took measures to reduce expenses. The airline added that it has renegotiated contracts with vendors and is working to achieve a lean cost structure.

“In FY21, despite the challenges of the pandemic, we stayed focused on our expansion strategy and launched operations to six new international destinations under travel bubble agreements, including London, Dhaka, Doha, Frankfurt, Sharjah and Malé, besides resuming operations to Dubai. We also managed to build on our operational capacity by adding one Boeing 787-9 Dreamliner, two Airbus A321neo and eight Airbus A320neo aircraft to our fleet,” a Vistara spokesperson said.