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<\/p>\nTata Group-owned AirAsia India, which is in the process of being merged with Air India Express, has taken short-term loans worth Rs 630 crore during the last six months to deal with cash crunch.<\/p>\n
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AirAsia India has been making losses since its first commercial flight on June 12, 2014.<\/p>\n
Its net loss increased by 42 per cent to Rs 2,178 crore in FY22.<\/p>\n
Standard Chartered Bank had given Rs 200 crore as short-term loan and Rs 30 crore as overdraft facility to the airline last month, according to documents reviewed by Business Standard (see table).<\/p>\n
IndusInd Bank gave Rs 200 crore to the airline in a short-term loan to the airline in June.<\/p>\n
Tata Capital gave a short-term loan of Rs 200 crore in April this year.<\/p>\n
These short-term loans have been given to the airline at around eight per cent interest rate, according to the documents.<\/p>\n
The three financial institutions as well as AirAsia India did not respond to Business Standard’<\/em>s queries regarding this matter.<\/p>\n After winning the bid in October last year, the Tata Group took control of Air India on January 27.<\/p>\n The Competition Commission of India (CCI) had on June 14 approved Air India’s request to acquire AirAsia India.<\/p>\n Low-cost airline AirAsia India is in the process of being merged with Air India Express, a low-cost subsidiary of Air India that operates flights mainly on Gulf routes.<\/p>\n AirAsia India recorded 5.8 per cent domestic market share in August, according to data of the Directorate General of Civil Aviation (DGCA).<\/p>\n The low-cost carrier currently operates 28 aircraft in its fleet.<\/p>\n Vistara, a 51:49 joint venture of the Tata Group and Singapore Airlines, has also been making losses since its inception.<\/p>\n The Tata Group is yet to take a decision on its merger with Air India.<\/p>\n Both Vistara and Air India are full-service carriers.<\/p>\n The coming years in the Indian aviation industry are likely to see intense competition among carriers with new airline Akasa Air entering the market.<\/p>\n Also, IndiGo is adding capacity and revamped Jet Airways will soon start operating flights.<\/p>\n Aviation consultancy firm CAPA, in its report in April, stated, “We are entering this new period of uncertainty with potentially more airlines (Akasa Air and Jet) than were operating pre-Covid.<\/p>\n “This comes together with the formal entry of Air India Express in the domestic low-cost carriers market strengthened by its likely merger with AirAsia India.”<\/p>\n “This will intensify the hyper-competitive environment — both in the full service and low-cost segments. It will mean that viability remains elusive for most,” it added.<\/p>\n