It is worth mentioning that the market capitalization of SpiceJet, the airline running successfully in the country, is only Rs 7,892 crore, i.e. this airline can be bought in less than Rs 8,000 crore capital. The total income of Air India was Rs 26,400 crore in the financial year 2018-19. During this time the company had to incur an operating loss of Rs 4,600 crore. After rising oil prices and the closure of airspace for Indian aircraft of Pakistan, the company is incurring a loss of 3 to 4 crores daily. A senior officer of the company told news agency PTI that Air India suffered an operating loss of Rs 175–200 crore due to the closure of Pakistani airspace in the June quarter alone.
Rs. 491 Crore Loss due to closure of Pakistani Airspace
According to government data, by July 2, Air India has lost Rs 491 crore due to the closure of Pakistani airspace. Significantly, Pakistan first closed its airspace after the Balakot strike in February, it was opened in July. After that, in the atmosphere created after the Government of India abolished Section 370 related to Kashmir, Pakistan again closed its airspace at the end of August. Private airlines SpiceJet, IndiGo and GoAir have lost Rs 30.73 crore, Rs 25.1 crore and Rs 2.1 crore, respectively.
Despite this, the officials hope that by the end of this financial year i.e. 2019-20, the debt-ridden Air India will come back to profit. He says that if fuel prices do not increase anymore and foreign currency does not fluctuate much, then Air India could get an operating profit of 700 to 800 crores this year. According to him, the load factor in Air India, i.e., seat occupancy or the number of passengers is improving. Air India currently operates flights to 41 international and 72 domestic destinations.
Total debt of Rs 58,000 crore
Significantly, Air India has been facing huge losses for the last several years and is in debt. Preparations are being made to recover its health through disinvestment. Air India has a total debt of Rs 58,000 crore and airlines have to spend Rs 4,000 crore annually to repay it. In many ways, efforts are being made to improve the airlines. A Special Purpose Vehicle Air India Assets Holding Limited (AIAHL) has been set up and preparations are being made to issue bonds worth Rs 22,000 crore in the next few weeks. The first such bond of Rs 7,000 crore can be issued on 16 September.