{"id":34250,"date":"2018-10-30T16:31:31","date_gmt":"2018-10-30T11:01:31","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=34250"},"modified":"2018-10-30T16:31:31","modified_gmt":"2018-10-30T11:01:31","slug":"govt-plans-to-sell-air-india-ai-express-together","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/govt-plans-to-sell-air-india-ai-express-together\/","title":{"rendered":"Govt. plans to sell Air India, AI Express together:"},"content":{"rendered":"<p><a href=\"http:\/\/www.thehindu.com\/todays-paper\/govt-to-sell-air-india-ai-express-together\/article19958563.ece\"><span style=\"font-weight: 400;\">Govt. plans to sell Air India, AI Express together<\/span><\/a><span style=\"font-weight: 400;\">:<\/span><\/p>\n<p><b>Context<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The <\/span><b>National Democratic Alliance (NDA)<\/b><span style=\"font-weight: 400;\"> government is working to <\/span><b>conclude the sale of national carrier Air India by June 2018<\/b><span style=\"font-weight: 400;\"> and is keen on selling its core airline operations, together with its low-cost international airline, Air India Express.<\/span><\/li>\n<\/ul>\n<p><b>Decision taken by Air India-specific Alternative Mechanism<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">As per a decision taken by the Air India-specific Alternative Mechanism, the Centre will look to sell <\/span><b>AI\u2019s regional airline Alliance Air<\/b><span style=\"font-weight: 400;\"> to a <\/span><b>separate universe of bidders<\/b><span style=\"font-weight: 400;\"> while Air India and Air India Express will likely go together.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The ministerial group meeting held on September 21 was of view that <\/span><b>a separate universe of bidders or prospective buyers<\/b><span style=\"font-weight: 400;\"> be invited for Air India\u2019s ground handling subsidiary <\/span><i><span style=\"font-weight: 400;\">\u2014 Air India Air Transport Service Limited (AIATSL)<\/span><\/i><span style=\"font-weight: 400;\"> \u2014 and its <\/span><i><span style=\"font-weight: 400;\">maintenance, repair and overhaul (MRO) unit<\/span><\/i> <i><span style=\"font-weight: 400;\">\u2014 Air India Engineering Services Limited (AIESL)<\/span><\/i><span style=\"font-weight: 400;\">.<\/span><\/li>\n<\/ul>\n<p><b>Status of Air India<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Air India has amassed a debt of Rs 50,000 crore over the years, half of which is on account of buying costly aircraft beyond its means.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Once the nation&#8217;s largest carrier, Air India&#8217;s market share in the booming domestic market has slumped to 13 per cent as private carriers expanded.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Air India, which has fleet size of 114, mostly Boeings and Airbuses, is estimated to have booked operating profit of Rs 300 crore in 2016-17, almost three times the Rs 106 crore recorded in 2015-16.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The government will infuse Rs 1,800 crore from the 2017-18 Union budget, after pumping in close to Rs 24,000 crore between April 2012 and March 2016, from taxpayers\u2019 money.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Air India is trying to shore up revenues through <\/span><span style=\"font-weight: 400;\">streamlining routes, phasing out of old fleet and consequential reduction in maintenance cost and closure of some overseas offices<\/span><span style=\"font-weight: 400;\">.<\/span><\/li>\n<\/ul>\n<p><b>Talks with buyers<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><b>Prospective buyers<\/b><span style=\"font-weight: 400;\"> will be available from international airlines if bids for Air India and Air India Express are called together.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Since Alliance Air operates flights mainly on <\/span><b>regional domestic routes<\/b><span style=\"font-weight: 400;\">, it makes more sense to sell it off separately.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The decision was taken after the government <\/span><b>held several rounds of backchannel talks<\/b><span style=\"font-weight: 400;\"> with prospective buyers of Air India and its subsidiaries.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The government met companies <\/span><b>involved in MRO, ground handling and airline operations<\/b><span style=\"font-weight: 400;\"> to examine whether all the subsidiaries should be sold off together or calling for separate set of bidders would increase Air India\u2019s valuation.<\/span><\/li>\n<\/ul>\n<p><b>Interested buyers<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Selling Air India in parts could help the <\/span><b>company attract more buyers and reduce some debt<\/b><span style=\"font-weight: 400;\"> of the parent company.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Aviation services provider <\/span><b>Bird Group<\/b><span style=\"font-weight: 400;\"> showed interest in buying Air India\u2019s ground-handling unit <\/span><b>AIATSL,<\/b><span style=\"font-weight: 400;\"> making it the second company to show such interest after <\/span><b>Inter Globe Aviation&#8217;s IndiGo <\/b><span style=\"font-weight: 400;\">last month.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Indigo was keen on buying the <\/span><b>international arm and low-cost division of the 1930<\/b><span style=\"font-weight: 400;\">-incorporated carrier that is known for its Maharajah mascot. <\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The Tata Group, which has stakes in Vistara and AirAsia India, has also been mentioned as a possible suitor.<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Govt. plans to sell Air India, AI Express together: Context The National Democratic Alliance (NDA) government is working to conclude the sale of national carrier Air India by June 2018 and is keen on selling its core airline operations, together with its low-cost international airline, Air India Express. Decision taken by Air India-specific Alternative Mechanism&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/govt-plans-to-sell-air-india-ai-express-together\/\">Continue reading <span class=\"screen-reader-text\">Govt. plans to sell Air India, AI Express together:<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[555],"tags":[],"class_list":["post-34250","post","type-post","status-publish","format-standard","hentry","category-test-1","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/34250","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=34250"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/34250\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=34250"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=34250"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=34250"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}