AirAsia India loss rises 95% to Rs 1,533 cr in FY21; Vistara's loss narrows

Air travel in FY 2021 was marred by Covid-19 pandemic which led to two-month suspension of flights, grounding of fleet and losses.

AirAsia India’s losses nearly doubled to Rs 1,533 crore on a year-on-year basis in FY21 while those of Vistara narrowed down to Rs 1,612 crore in the same period, according to company filings.

Air travel in FY21 was marred by Covid-19 pandemic, which led to two-month suspension of flights, grounding of fleet and losses. Domestic air traffic slipped to seven-year low last year and the recovery has been gradual due to state-wide restrictions and testing.

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

On the other hand, AirAsia India’s net loss rose 95 per cent from Rs 782.30 crore to Rs 1,533 crore in the same period. AirAsia India’s auditor has flagged off risk about the company's ability to continue as a going concern in view of complete erosion of net worth following 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 Rs 1,358.72 crore in FY21 from Rs 3,682.91 crore a year earlier. Vistara’s revenue dropped 52 per cent to Rs 2,243.49 crore in FY21 from Rs 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 to save costs. The company has instead preferred lower priced leases from third parties.

In its latest annual report, AirAsia India said that 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-December FY21, it said. The airline also improved its market share in cargo and cargo revenue increased from Rs 67 crore to Rs 81 crore on a year-on-year basis.

Both AirAsia India and Vistara benefited from foreign exchange gains due to strengthening of Indian rupee in FY21. Indian accounting standards require airlines to record the present value of lease liability over the entire term and fluctuation in currency results in gains or losses.

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 the 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 Heathrow, 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.

Vistara added that it has renegotiated contracts with vendors and is working to achieve a lean cost structure while growing its cargo and ancillary revenue with new services.