Debt-ridden national carrier Air India could be split into four separate companies for sale, Minister of State Civil Aviation Jayant Sinha told Bloomberg on Monday. The stake sale will be completed by the end of 2018, and the government will assume the non-core debt of Air India before the sale takes place, the minister said.

The four separate firms will be Air India and Air India Express, Ground Handling, Alliance Air and MRO. Air India and Air India Express will be sold as one company, Bloomberg reported. Bidders will be allowed to bid for one or more companies.

Privatising Air India

The national carrier is surviving on taxpayers’ money, and the government has decided on a strategic divestment to cut these losses.

At the end of 2016-’17, Air India’s total debt was Rs 48,876 crore. The company has not made any profit in 10 years. In 2017-’18, it is expected to report a loss of Rs 3,579 crore.

In May 2017, the Niti Aayog had also recommended that the airline be strategically divested. Arvind Panagariya, who was then the vice chairperson of the think tank, had said Air India’s debt was “simply not sustainable”.

On January 10, the Cabinet had relaxed the foreign direct investment rules for civil aviation by allowing foreign companies to invest up to 49%. However, these investments cannot exceed 49% directly or indirectly, and the ownership and control of the airline will remain with an Indian national.

On January 12, Sinha had hinted at the government retaining a minority stake in Air India. The Union minister said, “If the government was to disinvest 60% of Air India.... 49% of the 60%, for instance, could be with the foreign player, then 11% could stay with an Indian player and 40% could stay with the government. So the 51% would be met,” Sinha had told Moneycontrol in an interview.