Government Working On Strategic Sale Of Air India Subsidiary
Government considers strategic sale of Air India’s subsidiary, AIATSL, to raise funds and help the debt-ridden national carrier.
The government is mulling the strategic sale of debt-ridden Air India’s subsidiary, AIATSL, to raise funds and help the national carrier, according to official sources.
Sale of Air India Air Transport Service, which provides ground handling services, is being planned as part of the turnaround scheme for the national carrier, whose debt mounted to Rs 48,000 crore in March 2017. “The Expression of Interest (EoI) for bidders would be floated soon after the Group of Ministers clears the EoI,” sources told PTI.
The stake sale plan follows the decision of Finance Minister Arun Jaitley-led ministerial panel in June to make the airline competitive, by cutting down debt and raising resources by selling land assets and other subsidiaries.
The Group of Ministers had decided to revive Air India after the government’s attempt to sell 76 percent stake in the airline failed to attract any bidder earlier this year.
The government had originally proposed to offload 76 percent equity share capital of the national carrier as well as transfer the management control to private players. The buyer would have had to take over Rs 24,000 crore debt or the carrier along with over Rs 8,000 crore of liabilities.
As per latest available data, in 2016-17, two subsidiaries of Air India — AIATSL and Air India Express Ltd — reported profits. While AIATSL earned a profit of Rs 61.66 crore in 2016-2017, another subsidiary AI Express earned Rs 297 crore.
Some of the other subsidiaries of Air India include Air India Charters Ltd., IAL Airport Services Ltd., Airline Allied Services Ltd., Air India Engineering Services Ltd. and Hotel Corporation of India Ltd.
AIATSL was incorporated in June 2003 with the objective of carrying on the business of providing all types of services at airport. Under the administrative control of Ministry of Civil Aviation, AIATSL is a 100 percent subsidiary of Air India. The company provides repairing, maintaining, servicing, refurbishing providing engineering services of and for aircraft.