Air India’s ground handling firm to be sold to pay national carrier’s debt, says Centre
Air India Air Transport Services is the national carrier’s only profitable subsidiary.
A ministerial panel led by Union Finance Minister Arun Jaitley on Tuesday decided to sell Air India’s ground handling firm and use the proceeds to pay off part of the airline’s debt.
The Centre will move Air India Air Transport Services Ltd to a special purpose vehicle it directly owns, Mint reported. Once the transfer is completed, the government will invite expressions of interest in the company, Civil Aviation Secretary RN Choubey told reporters in New Delhi after the panel met.
Air India Air Transport Services Ltd is the national carrier’s only profitable subsidiary, Business Standard reported. In 2016-’17, it earned a profit of Rs 33.4 crore, and over Rs 620 crore in revenues from its handling operations.
In March, the government had planned to divest 76% stake in Air India, ignoring a parliamentary panel’s recommendation to give the debt-ridden airline five years to revive itself. The proposed stake sale, however, failed to take off as the Centre did not receive any expressions of interest from potential bidders by the end of the May 31 deadline.
In 2012, the government had promised to infuse Rs 50,000 crore in the airline till 2032. The company has received Rs 27,195 crore till date.
In July, the Centre had sought Parliament’s approval to sanction a Rs 980-crore supplementary grant for investment in equity shares for Air India during the 2018-’19 financial year. The airline’s total cumulative losses stood at Rs 47,145.62 crore in financial year 2016-’17, according to audited accounts.