Chairman's Statement

Dear Shareholders,

It is my privilege to present the 6th Annual Report of the Company for the year 2023-24. I would like to thank each one of you for making it convenient to attend this meeting.

I take this opportunity to share the performance highlights of the company during the year:

Financial Performance

The financial performance of your company and the group during FY 2023-24 was as under:

Standalone Financials

During the financial year 2023-24, the Company recorded a Profit Before Tax of ₹1,086.67 million and a Profit After Tax of ₹4,847.11 million, after accounting for a Deferred Tax Income of ₹3,760.44 million arising from carry-forward losses of previous year. In comparison, the previous year (FY 2022-23) reflected loss of ₹5,512.16 million.

This improvement was primarily due to net decrease in expenses in FY 2023-24 compared to FY 2022-23 amounting to ₹4,544.21 million. This was mainly attributable to lower finance costs due to the full-year impact of the repayment of NCD Series-1 in December 2022, reduced medical expenses compared to the previous year, and higher provisioning for stamp duty and registration charges during the year compared to previous years’ provisions for immovable properties under title transfer from Air India.

Consolidated Financials for AIAHL and Group Companies

The Consolidated Financial Statements represent consolidation of Company’s financials with the financials of four Subsidiary Companies viz. AI Engineering Services Limited (AIESL), AI Airport Services Limited (AIASL), Alliance Air Aviation Limited (AAAL) and Hotel Corporation of India Limited (HCIL). The Consolidated Net profit of the AIAHL group for FY 2023-24 is ₹ 900.80 million compared to previous year Net Loss after tax of ₹ 4944.79 million.

The consolidated results reflect a net profit in the current year over the previous year’s losses, primarily due to the improved financial performance of the holding company, AIAHL, on a standalone basis, as noted above. This was achieved despite the net consolidated results from the discontinued operations of the subsidiary companies showing lower total profits by ₹ 4,253.61 million in the current year compared to previous financial year 2022-23.

AI Engineering Services Limited (AIESL), a wholly owned subsidiary - During FY 2023-24, the total revenue increased from ₹ 20447.83 million in the previous year to ₹ 21,803.53 million in the current year i.e., an increase of approx. ₹ 1355.70 million (which is 7% higher than the previous year). The total expenditure of the company increased from ₹ 14,188.11 million to ₹ 15,524.50 million in the same period. The Company has registered a Net profit of ₹ 2,357.28 million in FY 2023-24 as compared to Net profit of ₹ 6,444.35 million in FY

2022-23. The lower profits were due to a one-time provision made for arrears of implementation of 3rd PRC for employees for ₹2532.60 million.

AI Airport Services Limited (AIASL), a wholly owned subsidiary - During FY 2023-24, the total revenue of the Company was ₹ 8,759.78 million as against the total revenue of ₹ 9,322.98 million during FY 2022-23. The total expenses were ₹7,988.73 million as against expenses of ₹8,350.01 million during FY 2022-23. Profit before tax during the year ended 31st March 2024 was ₹771.05 million against the Profit before Tax of ₹972.97 million during FY 2022-23. The Company has registered a Net Profit of ₹530.81 million as against the Restated Net Profit of ₹619.35 million in FY 2022-23.

Alliance Air Aviation Limited (AAAL), a wholly owned subsidiary - During FY 2023-24, the total revenue of the Company was ₹ 9625.53 million as against the total revenue of ₹ 11049.59 million during previous year FY 2022-23. The total expenses were ₹ 15,835.73 million as against expenses of ₹16715.32 million during the previous year FY 2022-23. The Company registered a Net loss of ₹6195.58 million as compared to a Net Loss of ₹5657.72 million in the FY 2022-23.

Hotel Corporation of India Limited (HCIL), subsidiary - During the Financial Year 2023-24, the overall revenue has increased to ₹632.17 million from ₹547.32 million of the previous year whereas the total expenses were lower at ₹ 1246.44 million compared to ₹1251.15 million of previous year FY 2022-23. The Company registered a Net Loss of ₹638.85 million as against ₹685.62 million in the FY 2022-23.

Operational Performance

Standalone performance

During the year, the Company earned rental income of ₹ 1193.82 million and realized monetization proceeds of ₹ 623.60 million through monetization of properties.

AIAHL has utilized Government grant funds net of receipts from monetization proceeds, rental income, interest on FDRs, etc., thereby reducing the overall withdrawal of Government grant funds for repayment of Government Guaranteed NCDs aggregating ₹1,49,850 million.

It is further noteworthy that AIAHL contributed to the Exchequer through payments of GST amounting to ₹138.24 million during FY 2023–24.

Subsidiaries Performance

AI Engineering Services Limited, during FY 2023-24, significantly expanded its service portfolio. The Company provided line maintenance services to Air India, Air India Express, Fly91, Alliance Air and various international operators including Kuwait Airways, Singapore Airlines, Quikjet, Pradhan Air, Manta Aviation, M Jets International, Buddha Air, Drukair and Akasa Air. Base and engine maintenance services were extended to major customers such as Air India, Air India Express, Alliance Air, IAF, SpiceJet, Fly91, Quikjet, Tashi Air, Global Aerotech, WLFC, Sojitz India Pvt. Ltd. and Vman Aviation Services. AIESL also supported leading lessors including ICBC, Jackson Square Aviation, CCB Leasing and Aviation Capital Group by undertaking aircraft maintenance, storage recovery, RTS, re-delivery, BSI, and engine preservation at Delhi and Mumbai.

AIESL has approval from 15 foreign Civil Aviation authorities namely EASA, FAA, Qatar, Kuwait, GACA (UAE), CAA Singapore, CAA Sri Lanka, CAA Nepal, CAA Malaysia, CAA of Bangladesh, PACA Oman, CAA of Egypt, etc. AIESL has applied for approval of CAA of Brunei.

AIESL (Northern Region) has undertaken capability enhancement for CFM LEAP-1A engine checks to cater to future demand. Similarly, in the Western Region of AIESL, agreement for Phase1 Check of Pratt & Whitney engines was completed for PW1100 engines of Airbus NEO aircraft. In Nagpur MRO, Engine Test Cell has acquired approvals from EASA & FAA for testing of GEnx & GE90 engines. The GEnx engines require a QT (Quick Turn) maintenance check, at Nagpur MRO, we have carried out 4 QT checks. In other Regions like Southern Region and Eastern Regivon capability enhancement has been undertaken considering the future demands of ATRs and NEO & MAX aircraft which would be operated by Airlines in future. The company became the only MRO in India with the expertise to Overhaul Landing Gears of B737 and A320 aircraft.

AI Airport Services Limited, during FY 2023–24, reinforced its position as the largest Ground Handling Agency in India with operations at nearly 150 airports and a market share of 47%. The Company achieved its highest-ever performance by handling 2,20,722 flights, including 1,19,343 AI Group and Alliance Air flights, 56,123 flights of scheduled client airlines, 21,983 flights of non-scheduled operators, and 441 Haj flights. AIASL also strengthened its cargo operations by managing international warehouses at Mumbai and Chennai, securing RA and RA3 accreditations to facilitate carriage of cargo to the UK and Europe and other EU countries. As the sole ground handling agency for VVIP/SESF flights of the Hon’ble President, Vice President, Prime Minister, and defence forces, the Company also expanded its defence handling operations in collaboration with HAL. In addition, AIASL embarked on a major Ground Support Equipment modernization programme, gained international recognition and awards from Cathay Cargo and Myanmar Airways, was honoured as the “Best Ground Handling Services Provider” at Wings India 2024 by FICCI, and was recognized by SF Airlines and at Chennai Airport for outstanding service, further consolidating its reputation as a trusted and globally aligned ground handling partner.

Alliance Air Aviation Limited, during FY 2023–24, continued to strengthen its role as India’s leading regional carrier under the RCS-UDAN scheme. Alliance Air successfully operated 139 out of 165 awarded routes, reaffirming its leadership position in regional aviation. During the year, AAAL launched new regional connectivity sectors including Amritsar–Kullu–Amritsar, Delhi–Bathinda–Delhi, Bengaluru–Salem–Bengaluru, Salem–Kochi–Salem, and Amritsar–Shimla–Amritsar, thereby extending vital air services to underserved regions. Further, under the Viability Gap Funding (VGF) support extended by the State Governments of Chhattisgarh and Uttarakhand, Alliance Air commenced flights on routes suggested by these State Government’s. The suggested routes not only bridge distances but also bring essential connectivity to regions with limited access. Alliance Air won Wings India 2024 Award for best airline under Regional Connectivity.

Hotel Corporation of India Limited, during FY 2023–24, delivered a improvement in performance, recording a 15.5% growth in revenues as against the previous year. EBITDA margins expanded by 75.18%, supported by higher demand and operational efficiencies, while the Flight Kitchen segment turned profitable with an operating profit of ₹4.8 crore. Focused cost-control measures, including minimizing wastage, enhancing process efficiency, and rationalizing manpower, enabled the Company to reduce operating costs by 19.68%, thereby narrowing the Gross Operating Loss as compared to FY 2022–23. These results reflect the Company’s sustained efforts to expand its client base and improve efficiency.

Future Plans

By utilizing internal receipts (rental income, monetization proceeds, interest on FDRs), AIAHL shall further lower the requirement for budgetary support in the years to come. Over time, increased monetization of non-core assets shall create sustainable cash inflows that shall partly finance debt obligations which is the obligation of erstwhile Air India post disinvestment.

Improvement in the operations of Subsidiary Companies viz. AIASL, AIESL, AAAL and HCI, together with AIAHL’s efficient utilization of internal resources, is progressively enhancing the Group’s value, reducing dependence on Government support, and contributing greater value to the Government of India.

As decided by the Government, AIAHL is in the process of disinvestment of its subsidiaries, namely AIESL, AIASL, and AAAL, in accordance with the due process of disinvestment under the guidance of the Department of Investment and Public Asset Management (DIPAM) and with the involvement of the concerned Ministries/Departments of the Government of India.

The monetization process of AI transferred assets is actively pursued with the relevant agencies and authorities by the company. Similar actions for identification, disposal, transfer, utilization, accounting of large number of non-core assets are also being pursued through constant interactions with the relevant local authorities.

Corporate Governance

Company believes in strong corporate governance and transparency. The Company ensures transparency in its working and reporting matters and following the guidelines on Corporate Governance issued by Department of Public Enterprises (DPE) and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, wherever applicable during the year.

Acknowledgement

I take this opportunity to thank the Government of India, especially Ministry of Civil Aviation and Ministry of Finance for their unstinted support. I also acknowledge the support extended by AAI, DGCA, BCAS, AERA and Airport Operating Agencies.

I would like to thank my colleagues on the Board of AIAHL and all the Subsidiaries for their valuable contribution and guidance.

I would like to place on record my appreciation of CEOs of all the Subsidiaries and employees for the dedication and hard work put in by all of them.

I look forward to their continued support to improve the performance of the Group in the future.