For sale. No buyers. Aviation industry major Bird Group on Wednesday said that it has expressed its interest in buying Air India’s ground handling subsidiary.
“We have sent a letter to the Ministry of Civil Aviation evincing our interest in buying the Air India Air Transport Services Limited (AIATSL),” an authorised spokesperson for the company said.
“We have also suggested to the government to consider selling the subsidiaries separately, so as to get the maximum capital out of the sale, so that the proceeds can be used to pay off the massive debt accumulated by the airline.”
According to the spokesperson, AIATSL is a “natural choice” for the company which is also engaged in providing ground handling services.
Bird Group was founded in 1971 with interest in travel technology, ground handling, aviation, hospitality, luxury retail and education services.
At present, it offers ground handling services at seven domestic airports.
The Bird Group’s interest in AIATSL was disclosed by Civil Aviation Secretary R.N. Choubey on the sidelines of an industry event held here on Wednesday.
On June 28, the Union cabinet gave its in-principle approval to divestment its stake in Air India, whose debt has mounted to over Rs 50,000 crore besides huge losses.
Subsequently, a ministerial group was formed to look into the modalities of Air India’s divestment process —- Air India-specific Alternative Mechanism — and is being headed by Finance Minister Arun Jaitley.
The group has been mandated to guide the strategic divestment process and to decide on key issues such as treatment of AI’s debt and hiving-off of its assets.
The demerger and strategic divestment of three profit making subsidiaries, the quantum of divestment and the universe of bidders will also be taken up by the ministerial group which is headed by Jaitley.
Currently, Air India’s portfolio of subsidiaries include Air India Engineering Services, Air India Transport Services, Alliance Air, Air India Express and the Hotel Corporation of India. It also has a ground handling joint venture AISATS.
The airline which is under massive debt burden of Rs 50,000 crore had posted an operating profit of Rs 105 crore in 2015-16. For the last fiscal (2016-17), the company is expected to report an improved operating profit margin.
The flag carrier had got a new lease of life on April 12, 2012, when the then UPA government had approved a Rs 30,000 crore turnaround (TAP) and financial restructuring plans (FRP) package spanning up to the year 2021.
After the cabinet’s in-principle approval for Air India’s divestment, budget passenger airline IndiGo expressed its interest in participating in the stake sale.
The budget airline said it is interested in Air India’s international operations and that of its low-cost international subsidiary Air India Express.
In an unrelated development, “Air India-specific Alternative Mechanism” is slated to meet later in the evening on Wednesday.