Sanjay Singh / New Delhi
In a bid to reduce debt of state-owned carrier, Air India, the government is contemplating on strategic sale of its subsidiary, Air India Air Transport Service (AIATSL), which provides ground handling services.
Government sources said this is being planned as part of the turnaround plan for Air India, as the carrier has piled-up debt of around Rs 48,000 crore in March 2017.
According to sources Expression of Interest (EoI) for bidders would be floated sometime soon after getting a clearance from the Group of Ministers (GoM). Earlier, the GoM had agreed to look at other possibilities after the government’s offer to sale 76 percent stake in Air India failed to attract any bidder last year.
The AIATSL’s stake sale is also part of the planned initiative taken by Union Finance Minister Arun Jaitley led ministerial panel in June this year in order to make Air India competitive by reducing debt and selling land assets and subsidiaries to raise resources.
The government has also decided for a fresh equity infusion of ₹ 860 crore in Air India and will provide a sovereign guarantee to raise up to Rs 2,100 crore, according to Rajiv Nayan Choubey, the civil aviation secretary.
AIATSL is a 100 percent subsidiary of Air India and provides ground handling services, servicing, repairs, maintenance, refurbishing and facilitating engineering services for aircraft. AIATSL It directly comes under the administrative control of Ministry of Civil Aviation.
The two subsidiaries of Air India AIATSL and Air India Express had posted profits in 2016-17. While AIATSL earned profit of Rs 61.66 crore in 2016-17 financial year, Air India Express earned Rs 297 crore. Other subsidiaries of Air India include Air India Charters, Airport Services Ltd, Airline Allied Services Ltd, Air India Engineering Services Ltd and Hotel Corporation of India Ltd.
Air India’s catering services provider, AISATS, which is a 50:50 JV between Air India and SATS Ltd also posted profit of Rs 66.06 crore in 2016-17. AIATSL came into existence in June 2003 with a mandate to carry on the business of providing all types of services at airport.