Alliance Air Set to Receive $140 Million from New Delhi for FY 2024-2025

Alliance Air, a key player in India’s regional aviation sector, is poised for a significant financial boost with a proposed INR11.6 billion (approximately USD139.5 million) allocation for the fiscal year 2024-2025. This funding, earmarked in India’s interim budget, is directed towards Air India Asset Holding Limited (AIAHL), the entity overseeing Alliance Air and other assets formerly associated with Air India prior to its privatization.

The budgetary support aims to fortify Alliance Air’s operations as it navigates through its privatization process. With restrictions on external borrowing, the allocation is set to partially alleviate the carrier’s debt burden. Notably, Alliance Air has been reported to owe the Airports Authority of India around INR833 million (USD11 million), underscoring the significance of this financial infusion.

In addition to the forthcoming fiscal year’s allocation, Alliance Air received an INR6 billion (USD72.3 million) direct equity infusion for the current financial year, surpassing the initially planned INR7.1 billion (USD85.5 million) subsidy. This move indicates the government’s continued support for the airline amidst its operational challenges and financial losses. For the fiscal year ending March 31, 2022, the airline reported losses amounting to INR4.47 billion (USD54.4 million).

Operating independently from Air India since April 2022, Alliance Air has committed itself to enhancing connectivity across India, particularly focusing on tier II and tier III cities. Despite facing financial hurdles, the airline’s expansion and brand awareness efforts are supported by government equity injections.

The airline’s fleet, as per the ch-aviation fleets data module, consists of two ATR42-600s, eighteen ATR72-600s, and one Do228-200, with another Dornier STOL turboprop on the way. Alliance Air’s fleet is leased from a range of firms, including Abelo Capital Aviation, Avation, DAE Capital, and TrueNoord, reflecting a diverse procurement strategy.

Furthermore, the Indian government’s Ude Desh Ka Aam Nagrik (UDAN) scheme, an initiative to enhance regional connectivity in which Alliance Air plays a crucial role, has been allocated INR5 billion (USD67.1 million) for the April 2024-March 2025 period. This funding underscores the importance of regional airlines like Alliance Air in achieving broader connectivity objectives and supporting the nation’s aviation infrastructure development.