Chairman's Statement

Dear Shareholders,

It is my privilege to present the 7th Annual Report of the Company for the year 2024-25. 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 group of Companies during FY 2024-25 is as under:

Standalone Financials

AI Assets Holding Limited: During FY 2024-25, the Company recorded a Profit Before Tax of ₹3,437.47 million and a Profit After Tax of ₹2,572.21 million, after accounting for Provision for Tax Current year (₹85.89 million) & Tax adjustment relating to earlier year (₹111.34 million) and Deferred Tax Expense (₹668.03 million) arising from carry-forward losses of previous year compared to the previous year (FY 2023-24) Net profit of ₹4847.11 million after Deferred tax income of ₹3760.44 million.

The profit before tax increased by ₹2350.80 million (216%) from the previous year profit due to increase in total income by ₹1817.76 million and decrease in total Expenses by ₹533.04 million in FY 2024-25 in comparison to previous FY 2023-24.

Consolidated Financials for AIAHL and Group Companies

The Consolidated Financial Statement represents your group of Company’s financials consisting of AIAHL and four Subsidiaries 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 loss of the AIAHL group for FY 2024-25 was ₹1,153.62 million compared to previous year’s PAT of ₹904.14 million. On consolidation basis, while subsidiaries within the disposal group experienced a modest profit increase of ₹167.08 million, this was offset by total tax expenses amounting to ₹494.55 million. The loss was further increased by higher deferred tax at the holding company level, incurring as expenditure of ₹865.26 million this year compared to an income of ₹3,760.44 million in the financial year 2023-24. AI Engineering Services Limited (AIESL), a wholly owned subsidiary - During FY 2024–25, the total revenue of the Company was ₹19,460.50 million as against the total revenue of ₹21,830.27 million during FY 2023–24. The total expenses were ₹15,627.38 million as against the total expenses of ₹15,524.50 million during FY 2023–24. The Company reported a net profit of ₹4,046.60 million during FY 2024–25 as against a net profit of ₹2,576.61 million in FY 2023–24, mainly due to accounting for exceptional item (write back of 3rd PRC provision of ₹1208.30 million). AI Airport Services Limited (AIASL), a wholly owned subsidiary - During FY 2024-25, the total revenue of the Company was ₹10,037.05 million as against the total revenue of ₹8,759.78 million during FY 2023-24. The total expenses were ₹9,996.12 million as against expenses of ₹7,988.73 million during FY 2023-24. The increase in expenditure was primarily attributable to higher employee benefit expenses, which rose to ₹7,612.66 million during FY 2024–25 from ₹5,958.11 million in FY 2023–24. Accordingly, the Company reported a net profit after tax of ₹29.38 million during FY 2024–25 as against a net profit after tax of ₹404.26 million in FY 2023–24. AIASL has recorded the highest ever earned revenue of ₹10,037.05 million in FY 2024-25 since, the operationalization of the Company. Alliance Air Aviation Limited (AAAL), a wholly owned subsidiary - During FY 2024–25, the Company recorded total revenue of ₹8,213.52 million as against ₹9,625.53 million in FY 2023–24. The decline in revenue was primarily attributable to lower aircraft availability, with an average of 12 aircraft per day during FY 2024–25 as compared to an average of 15 aircraft per day in the previous financial year. Total expenses during FY 2024–25 stood at ₹15,042.91 million as against ₹15,859.13 million in FY 2023–24. Consequently, the Company reported a net loss of ₹6,828.03 million during FY 2024–25 as compared to a net loss of ₹6,218.98 million in the previous financial year. Hotel Corporation of India Limited (HCIL), subsidiary - During FY 2024–25, the Company recorded total revenue of ₹463.61 million as against ₹632.17 million in FY 2023–24. Total expenses stood at ₹1267.61 million compared to ₹1246.44 million in the FY 2023-24. The increase in expenses was primarily due to higher employee costs arising from wage revision arrears pertaining to unionised workers recognised during the year. Accordingly, the Company reported a net loss of Rs. 825.14 million during FY 2024–25 as against a net loss of ₹638.85 million in FY 2023–24. FY 2024–25 represents a transition and reset phase for the Company, with a strategic focus on strengthening operational quality and preparing for new revenue models. The Company has initiated various cost optimisation measures, and operating costs are being progressively rationalised.

Standalone performance

AI Assets Holding Limited, during FY 2024-25, the Company recorded Rental income of ₹1,127.33 million as compared to previous income of ₹1636.76 million. However total income increased to ₹16,134.84 million in FY 2024-25 from ₹14,317.08 million in FY 2023-24. It is further noteworthy that AIAHL contributed to the Exchequer through payments of GST (net of Input credit availed) amounting to ₹324.8 million during FY 2024-25.

Subsidiaries Performance

AI Engineering Services Limited, during FY 2024–25, AI Engineering Services Limited (AIESL) continued to strengthen its position as a leading Maintenance, Repair and Overhaul (MRO) service provider in the region. The Company provided line maintenance services to major domestic airlines including Air India, Air India Express, Alliance Air and Akasa Air, as well as several international carriers such as Qatar Airways, Oman Air, Singapore Airlines, Malaysia Airlines, Kuwait Airways and Royal Brunei Airlines, among others. The Company also continued to provide line maintenance support at Kathmandu, reflecting its expanding international footprint. In addition to line maintenance, AIESL provided base and engine maintenance services to a diverse customer base comprising airlines, cargo operators and global aircraft lessors. The Company continued to support aircraft maintenance, storage recovery, return-to-service and re-delivery activities at its key MRO facilities located in Delhi, Mumbai, Nagpur and Thiruvananthapuram. During the year, AIESL further strengthened its technical capabilities and global credibility by maintaining approvals from 16 foreign civil aviation authorities, including the Federal Aviation Administration and the European Union Aviation Safety Agency. The Company also enhanced its engine maintenance capabilities, including development of checks for CFM LEAP-1A engines, while its engine test cell at Nagpur MRO secured approvals for testing GEnx and GE90 engines. Capability enhancements were also undertaken across other regions to cater to the growing maintenance requirements of next-generation aircraft such as ATR, NEO and MAX fleets. AI Airport Services Limited, during FY 2024–25, AIASL continued to strengthen its operational performance and industry leadership. The Company handled more than 1.5 lakh Air India Group and Alliance Air flights, in addition to over 43,000 scheduled client airline flights and more than 23,000 non-scheduled operator flights. With its presence now spread across about 91 airports in India, AIASL remains the largest ground handling agency in the country with an estimated market share of around 48%. The Company also manages international cargo warehouses at Chennai and Mumbai and achieved a significant milestone by securing Regulated Agent (RA and RA3) status, enabling direct cargo movement to the UK and Europe. AIASL continued to play a vital role in national operations by handling VVIP/SESF flights of the Hon’ble President, Vice President and Prime Minister of India, and by providing ground handling support for various defence operations across Indian airports. AIASL received several recognitions for its service excellence, including the “Best Ground Handler” award at Chennai Airport by SF Airlines. Further strengthening its global engagement, AIASL was recognized as a valued member of the Ground Handling Partnership Program of the International Air Transport Association for the year 2025. AIASL successfully handled Aero India 2025 at Yelahanka Airport, Bengaluru, the largest defence air show in Asia organized by the Ministry of Defence. Alliance Air Aviation Limited , during FY 2024–25, 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 RCS UDAN flights on Jaipur-Bikaner, Jaipur-Kullu, Dehradun/Kullu,Mumbai-Jalgaon, Jalgaon/Ahmedabad, Ahmedabad/Keshod, Guwahati/ Tezu, Tezu/ Imphal, Guwahati/Rupsi, Kolkata/Rupsi, Tezu/Jorhat, Pasighat/Shillong and Pasighat/Shillong routes. Further, under the Viability Gap Funding (VGF) support extended by the State Governments of Haryana, Manipur, Chhattisgarh and Uttarakhand, Alliance Air commenced flights on routes suggested by these State Government’s. These State supported routes are essential in providing connectivity to geographically challenging and strategically vital regions, particularly in the North-East. Alliance Air won the award for Best Indian PSU for excellence in Regional Connectivity and Best CSR Initiative Award for our flagship programme providing school children with their first flight experience. Hotel Corporation of India Limited , during FY 2024–25, the Company focused on strengthening its operational performance across its hospitality and catering segments. The Centaur Hotel at IGI Airport (Terminal 3) remained the core operational asset, with emphasis on improving occupancy levels, increasing ARR, and establishing itself as a preferred venue for weddings, conferences, and social events, supported by high-quality food and service standards. In the catering segment, Chefair Mumbai expanded its operations by commencing in-flight catering services for airlines such as Air India, SpiceJet, Alliance Air, and charter flights, leading to increased operational activity. The Company also initiated measures for cost optimisation and operational efficiency, while exploring renovation and upgrade plans to enhance guest experience and support future growth.

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. The monetization process of AI transferred assets is actively being 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 support. 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.