ISLAMABAD: Indian flag carrier Air India is set to report an annual loss of at least $1.6 billion, as a deadly crash last year and Pakistan’s continued closure of its airspace weigh on the airline’s finances, Bloomberg reported this week.
The carrier was “on track to post a loss of at least Indian Rs150 billion [$1.6 billion]” for the financial year ending March 31, according to Bloomberg, citing people familiar with the matter.
Air India has remained under scrutiny since a Boeing 787 Dreamliner crashed in June last year, killing more than 240 people. Operational concerns resurfaced last month when an Air India Boeing 777 returned to its origin airport after a drop in oil pressure forced pilots to shut down one of the aircraft’s engines.
Bloomberg reported that Air India had been moving toward financial stability, but said the Dreamliner crash in June “undid years of progress.”
The airline’s earnings were further pressured after Pakistan closed its airspace to Indian flights following clashes between the two neighbors in May last year. The restriction has since been extended on a monthly basis through notices to airmen (NOTAMs), with the latest extension in place until 5:00am on February 24.
According to people familiar with the situation, the airspace closure forced Air India’s aircraft “to fly longer routes at higher costs to Europe and the US,” Bloomberg reported.
The crash also dented passenger confidence, contributing to what Bloomberg described as a year marked by flyer anxiety, flight delays and mass cancellations.
Separately, business intelligence platform Tofler said Air India has incurred cumulative losses of Indian Rs322.1 billion ($3.51 billion) over the past three years, underscoring the scale of the challenges facing the airline as it attempts to return to profitability.
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