Air India to be Split Into 4 Entities Ahead of Sale

Air India

Last week, India had cleared a proposal to allow foreign investors to own up to 49 percent in the carrier.

Sinha added that Air India and Air India Express, a subsidiary of the national carrier, will be sold as one company.

The Union Cabinet on June 28, 2018, gave an "in principle" go ahead for the strategic disinvestment of Air India, which has a debt of over Rs 52,000 crore and surviving on a bailout package rolled out by the previous UPA government, after tasking a Group of Ministers to work out its modalities.

Sources in the know said the government is mulling providing airline employees the option of joining public sector companies.

In order to ensure a smooth strategic disinvestment, the ministries are looking for options to revive the airline's fortunes.

Responding to the multiple queries questioning government's strategy to absorb the employees apart from extending VRS package, the Civil Aviation Secretary R N Choubey told a leading News Agency, "Various options are under consideration to protect the interests of the employees". Earlier in 2000, the then A B Vajpayee government had cleared the disinvestment of Air India, but it could not go through, following protests. Along with its subsidiaries it has almost 29,000 employees. The panel is also understood to have concluded that the equity infusion in the national carrier, as part of the turnaround plan (TAP), was made on a "piece meal basis", adversely affecting its financial and operational performance and "forcing" the airline to take loans "at a higher interest rate to meet the shortfall".

Air India is not an organisation suffering from a lock- out or in a state of inaction, he added.

While foreign airlines were allowed to invest up to 49 per cent in the paid-up capital of Indian private airlines under the government approval route, this provision was not applicable to Air India. Further, domestic and global business may not be sold separately.



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