Surviving Covid is the mantra, plan is ready to ensure we don't run out of cash: Alliance Airline

This comes as Airports Council International World estimates the airport industry will suffer a 60 per cent reduction in revenues, reaching an unprecedented loss of  $104.5 billion.

Published: 22nd October 2020 10:09 PM  |   Last Updated: 22nd October 2020 10:09 PM   |  A+A-

For representational purposes

Express News Service

CHENNAI:  Surviving Covid-19 is the mantra of Alliance Airlines which has been reviewing its operation every two weeks to ensure the airline doesn't operate on losses, said chief executive officer C S Subbiah.

The Airline, which has turned a new leaf by reporting an operating profit of Rs 65.09 crore for the first time since its inception on April 15, 1996, has been struggling like other airlines due to the pandemic, said Subbiah, adding that the plan is to ensure the airline doesn't run out of cash. 

Currently, the airline is flying 77 flights. The flight from Chennai to Jaffna, which bridged the connectivity gap between the two cities after 41 years, has now stopped and Alliance  Air is looking for the Sri Lankan government's nod to open up the airspace to Jaffna and Palali, says Subbiah.

"Currently, we don't have any major plans and our aim is to survive the pandemic," he says. Interestingly, this comes as Airports Council International (ACI) World estimates the airport industry will suffer a 60 per cent reduction in revenues, reaching an unprecedented loss of  $104.5 billion. The International Air Transport Association (IATA) estimates that the airline revenue will be down at least 50 per cent ($419 billion compared to $838 billion in 2019).

Subbaih says Alliance Air has reported an EBITDA of Rs 482 crore, in a total revenue of Rs 1181.15 crore last year. These figures are for the fiscal year 2019-2020. The net profit of Alliance Air would have touched Rs 37 crore but for the adoption of the new accounting standard, which resulted in a net loss of Rs 201 crore. Interestingly,  the number of destinations has gone up to 61 from 55 in the last financial year. With the increased number of daily departures to 126 against  109 last year, the total number of passengers flown was 1.64 million, an increase of 2.5 percent with a seat factor of 73 percent.

While Alliance Air is on a cost-cutting measure to survive during the Covid-19 pandemic, Subbiah feels the festival season could help revive the dwindling fortune. But then Covid-19 uncertainty is worrying him. He says Tamil Nadu had seen a large number of cases earlier. Now the number of cases in Tamil Nadu is dwindling but the cases are rising in Karnataka. Even a large number of cases are reported in Andhra. "We are taking into all these while operating our flights," he says.

Interestingly, Subbiah feels Alliance Air will survive as they have the backing of Air India. "We have seen the worst now, it is time to fly ahead," he says.

Alliance Air has operated 30,649 flights to 61 destinations and 735  weekly flights in 2019-20, with higher utilization of aircraft and with one of the lowest aircraft to manpower ratio of 1:45 in the world. The airline has a young fleet of 18 ATR-72-600 aircraft with an average age of fewer than four years.


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