Financial Health of Air India

Group 1
Wg Cdr S.K.Shah, Marc Sani, Sugandha Vishnoi, Sateesh
Palakkeel, Abhishek Kumar, Mayank, Lakshman R

Introduction
Founder: J. R. D. Tata founded Tata Air Services (Tata Airlines) in 1932 as a division of
Tata Sons Ltd.
Re-christened: Tata Airlines changed its name to Air India after World War II.
PLC: Air India became a public limited company on the 29th July 1946. Post
Independence Government of India had acquired a stake of 49% in 1948. Indian Airlines
starts its operation in the domestic sector and Air India goes ahead with International
operations as two separate entities.
Introduction of Jets: Air India introduced the first Boeing jet 707-420 aircraft, and two
years later, in June 1962, it became the world's first all-jet airline.
Merger: Merger of AI and IA took place in 2006-07 (Loss to the company was 770
Crores)
Cumulative Debt: The cumulative debt of Air India as on today is 5500 Crores.
AI Today:
- Fleet: Air India has a fleet size of 109 In Service Aircraft and has 26 orders in
the pipeline. The fleet consists of Aircrafts from Boeing and Airbus.
- Profit: Air India had made a profit of 6 Crores for the first time after Merger.
- Lifeline: Government infused equity to a tune of 30,000 Crores.

Star Alliance: On 11th July 2014, Air India had become the 27th Member to Join
Star Alliance.

Balance Sheet
Balance Sheet as at:

31-Mar14

31-Mar13

31-Mar12

From
2013-14

From
2012-13

0.00%

0.00%

I. EQUITY AND LIABILITIES

1. Shareholders Funds
(a) ShareCapital

(b) Reserves and Surplus

500 0.26%

500 0.45%

500

0.37%

-2572 -1.34%

-24540 -22.0%

-29611 -21.9%

21,968

-89.52% 5,071

-17.13%

-2072 -1.08%

-24040 -21.5%

-29111 -21.6%

21,968

-91.38% 5,071

-17.42%

2. Non-current Liabilities
(a) Long-Term Borrowings
(d) Long-Term Provisions

18197

9.5%

12245 11.0%

9001

6.7%

5,952

48.61% 3,244

36.04%

18847

9.8%

12245 11.0%

9001

6.7%

6,602

53.92% 3,244

36.04%

0.0%

0.0%

0.0%

154044 80.4%

55000 49.2%

65000

48.1%

99,044

180.08% -10,000

-15.38%

19301 10.1%

64000 57.3%

90000

66.6%

-44,699

-69.84% -26,000

-28.89%

190

0.1%

-2,907

-64.60% 4,310

227.00%

3. Current Liabilities
(a) Short-Term Borrowings
(b) Trade Payables
(c) Other Current Liabilities
(d) Short-Term Provisions

1593

0.8%

4500

4.0%

174938 91.2%

123500

110.6
%

155190 114.9%

51,438

41.65% -31,690

-20.42%

TOTAL (I)

191713 -17.5%

111705

-3.8%

135080 100.0%

80,008

71.62% -23,375

-17.30%

Balance Sheet

Balance Sheet as at:

II. ASSETS
1. Non-Current Assets
(a) FixedAssets
(c) Long-Term Loans and Advances
(d) Other Non-Current Assets
(iv) Deferred Tax Asset (Net)

31-Mar14

71758 37.4%

31-Mar13

76000

68.03
%

31-Mar12

60000

44.05
%

From
2013-14

-4,242

0.0%

0 0.00%

668.15 0.49%

7030

3.7%

67 0.06%

235 0.17%

6,963

78873 41.1%

76067 68.1%

60903 44.7%

2,806

From
2012-13

-5.58% 16,000

-668

26.67%
100.00%

1040.00% -168

-71.49%

3.69% 15,164

24.90%

2. Current Assets
(a) Current Investments
(b) Inventories
(c) Trade Receivables
(d) Cash and Bank Balance
(e) Short-Term Loans and Advances
(f) Other Current Assets

TOTAL (II)

107254 55.9%

23389
11546

20.93
%
10.33
%

51.45
%

83,865

358.57% -46,686

-66.62%

3600 2.64%

-6,101

-52.84% 7,946

220.72%

70075

5445

2.8%

0.0%

0 0.00%

0 0.00%

139

0.1%

720 0.64%

1629 1.20%

112838 58.9%
100.0
191711
%

35655 31.9%
100.0
111722
%

75304 55.3%
100.0
136207
%

-581

-80.69% -909

-55.80%

77,183

216.47% -39,649

-52.65%

79,989

71.60% -24,485

-17.98%

Profit & Loss Statement

Profit & Loss for year ended 31st March

I. REVENUE
(a) Revenue from Operations (gross)
II. Other Income
III. Total Revenue (I + II)
IV. EXPENSES
(a) Cost of Materials Consumed
(b) Purchases of Stock-in-Trade .
(c) Changes in Inventories of Work-InProgress,
Finished Goods and Stock-in-trade .
(d) Employee Benefits Expense .
(g) Other Expenses
Total
Profit before interest, tax, depreciation and
amortization
(e) Finance Costs (net)
(f) Depreciation and Amortisation Expense .
Total Expenses

FYE
31-32014

FYE
FYE 3131-3% 3-2013 %
2012
%

10,13,9
7,47,91
6,03,60
90 99.6%
0 99.7%
2 99.1%
4,159 0.4%
2,184 0.3% 5,460 0.9%
10,18,1 100.0 7,50,09 100.0 6,09,06 100.0
49
%
4
%
2
%

7,16,33
5,62,05
4,28,93
3 72.2%
6 76.0%
2 70.8%
2,75,47
1,77,75
1,76,91
0 27.8%
8 24.0%
3 29.2%
9,91,80
7,39,81
6,05,84
3
4
5
26,346

10,280

3,217

896.00
6.00
9,92,70
5

FY 2014

FY 2013

2,66,080

35.58% 1,44,308

1,975

90.43% -3,276

23.91%
60.00%

35.74% 1,41,032

23.16%

1,54,277

27.45% 1,33,124

31.04%

97,712

54.97%

2,51,989

34.06% 1,33,969

2,68,055

16,066

845

156.28% 7,063

0.48%
22.11%
219.55
%

896
6
7,39,81
4

6,05,84
5

2,52,891

34.18% 1,33,969

22.11%

Profit & Loss Statement

FYE
31-32014

Profit & Loss for year ended 31st March

%
V. Profit Before Exceptional Items and
Tax (III - IV)
25,444
VI. Exceptional Items
(a) Compensation on Voluntary Retirement .
(b) Loss on Sale/Provision for Diminution in
the
Value of Long-term Investments
(c) Impairment of Assets
(d) Exchange Loss (net) on Foreign Currency
Long-term
Borrowings including Revaluation thereof
(e) Prior period adjustments/items (net)
(f) Prior period tax adjustments (net)

(a) Current Tax .

(Less): Current Tax expense relating to
prior years
Net Current Tax expense
(b) Deferred Tax
Total Tax Expense

FYE
31-32012

10,280

3,217

15,164

FY 2013

147.51% 7,063

100.00% 480
100.00% -1,724

-480

480

FY 2014

2,204

9,800

10,500

4,500

190

-7,030

235

3,424

-7,265

133.33% 4,310
3091.49
% -3,189

4,735

3,614

-1,265

-26.72% 1,121

4,500

95.0
%

1,013

-480

25,444

302.6
10,500
%

3,470

%
219.55
%

2,204
480

Total (Exceptional Items)

VII. Profit Before Tax (V - VI)
VIII. Tax Expense

FYE
31-32013

15,644

159.63% 8,787

78.22%
867.42
%

190 5.3%

6,000

2268.4
2%
93.14%
31.02%
294.73

Key Ratios

31-Mar14
PROFITABILITY:
Gross Profit Margin (SALES - RM
CONSUMPTION)/SALES
Net Profit Margin (PAT/TOTAL
REVENUE)
Operating profit margin(PBIT/TOTAL
REVENUE)
Operating Cash Profit
Margin(EBITDA/TOTAL REVENUE)
Return on Assets(ROA) (PAT/TOTAL
ASSETS)
Return on Investment(ROI)(pre-tax)
(PBIT/TOTAL ASSETS)
Return on Equity
(PAT/SHAREHOLDERS' FUNDS)

31Mar-13

31Mar-12

From
2013-14

From
2012-13

2.2%

1.1%

-0.4%

1.1%

1.5%

2.2%

0.7%

-0.4%

1.5%

1.1%

2.5%

1.4%

0.5%

1.1%

0.8%

2.6%

1.4%

0.5%

1.2%

0.8%

11.5%

4.5%

-1.9%

6.9%

6.4%

13.7%

9.2%

2.4%

4.5%

6.8%

4394.8%

1013.0%

-520.2%

3381.8%

1533.2%

Current Ratio

0.65

0.29

0.49

Acid Test Ratio (Quick Ratio)

0.65

0.29

0.49

39

11

42

LIQUIDITY:

Receivables - DSO Collection Period

Key Ratios
31Mar-14

31Mar-13

31Mar-12

TURNOVER RATIOS:
Debtor's T.O

9.45

31.98

8.61

Fixed Assets T.O

12.91

9.86

10.00

Total Assets T.O

5.31

6.71

4.47

1.01

1.22

1.21

Debt-Equity Ratio (TOL/TNW)

-93.53

-5.65

-5.64

Long term Debt-Equity

-9.10

-0.51

-0.31

Interest Cover

29.40

LEVERAGE RATIOS:
Debt Ratio (TOTAL OUTSIDE
LIABILITIES/TOTAL ASSETS)

VALUATION RATIOS:
# of shares
Earnings per Share (EPS)
Price earnings (P/E)
Yield

50,000
439.48
0
100.0%

50,000
101.30
0
100.0%

50,000
-52.02
-0
100.0%

Burden on GOI

Recovery Plan
Partial/ Full Disinvestment
De-Merger of AI and IA
Reduction on Employee Cost
Freedom to be run Professionally
Phase out the Old Aircraft / Limit the inventory in terms of types of aircrafts
Diversify Operations
Operations on Profitable sectors
Take Pilots out of Industrial act
Improvement in On Time Performance and Passenger Load Factor

Introduction
Freedom to be run Professionally.

Introduction
Improvement in On Time Performance and Passenger Load Factor.

Introduction
Reduction on Employee Cost.

Introduction