TBM Staff - Mumbai The Indian government is planning to sell its shares in Air India’s former subsidiaries in FY25, according to Tuhin Kanta Pandey, Secretary of the Department of Investment and Public Asset Management.
However, the privatization of Container Corporation of India is not expected to progress soon. The subsidiaries under consideration for divestment include Air India Air Transport Services Ltd, Airline Allied Services Ltd, Air India Engineering Services Ltd, and Hotel Corporation of India Ltd.
“The Air India subsidiaries can be taken up for disinvestment, they’re part of the ongoing (pipeline),” Pandey was quoted as saying by Mint on Sunday.
The government has previously held road shows for divestment of Air India Engineering Services Ltd and approved the divestment process last year. These assets are held by Air India Assets Holding Ltd., a special purpose vehicle instituted in 2019 to hold the non-core assets and debt of Air India.
Divestment of all subsidiaries was approved by the Cabinet in 2017, but the process of seeking interest in the companies is yet to begin. In contrast, the government has not clarified whether the divestment process for Container Corporation of India will begin in the next financial year.
On January 27, 2022, Tata Sons acquired a 100 per cent stake in Air India through its fully-owned subsidiary Talace Private Limited. Later, it said that Air India and Vistara shall be merged into a single entity, likely to be completed by March 2024. Singapore Airlines will have a 25 per cent stake in this entity.
Apart from this, Air India Express and Air Asia India shall also be merged for creating a single low-cost airline. In order to achieve this goal, the Tata Group made a massive transformation plan for the airline and also for increasing its fleet size.
Last year, Tata Sons chairman N Chandrasekaran said that the entire fleet of the airline will be changed.
“The transformation is happening in human resources. We have completely revamped the technology. We are revamping engineering and ground handling. The entire fleet will get changed. We have made one of the biggest [aircraft] orders. And that’s a very bold bet,” Chandrasekaran said at the BT Mindrush & BT Best CEOs Awards event.
In June last year, the airline signed purchase agreements for 470 aircraft with Airbus and Boeing, announced in February of the same year. The purchase agreements for the two orders are worth around USD 70 billion by the list price of the aircraft.
Air India’s orders include 34 A350-1000, six A350-900, 20 Boeing 787 Dreamliners, and 10 Boeing 777X wide-body aircraft, as well as 140 Airbus A320neo, 70 Airbus A321neo, and 190 Boeing 737MAX narrow-body aircraft. Besides this, the airline will have options to buy another 370 planes– 300 from Airbus and 70 from Boeing.
