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The government is in the process of selling its entire stake in Air India but will be holding on to Alliance Air, which otherwise operates 70-seater ATR aircraft on regional routes.
“The aircraft will stay with Alliance Air till December 2024 and two new Boeing 777s ordered for VVIP flights are set to be delivered, fitted with the latest security systems by this year and next year, respectively,” said a senior government official. The 777s have already been delivered and are currently being customised as per the specifications of the Special Protection Group (SPG), the person said. The first plane will be inducted into service by June.
The Boeing 747 could then be sold separately after December 2024 — a decision in this regard has yet to be taken, the official said.
Air India has five Boeing 747s, acquired during 1993-96, one of which is grounded and can’t fly anymore. With one being sent to Alliance Air, Air India will be sold with three 747s.
These Boeing 747s, designated as Air India One when operating VVIP flights, are currently being operated by Air India to ferry the government’s top officials. Notably, the government also owes about Rs 750 crore to the national carrier for operating these flights.
Meanwhile, the government has almost finalised bid documents for the privatisation of Air India and is likely to use some of the money it gets to repay debt and liabilities.
“The idea is to repay these debt and liabilities from proceeds from the sale of Air India,” said another senior government official. “We do not know how much will we earn from the sale but the proceeds will go for repayment of debt and liabilities.”
As part of the approved sale plan, the government will seek bids for Air India along with Air India Express and the national carrier’s 50% stake in ground-handling company Air India Singapore Airport Terminal Services Ltd (AISATS).
Subsidiaries such as Alliance Air, ground-handling company Air India Air Transport Ltd and engineering subsidiary Air India Engineering Services Ltd have been transferred to Air India Asset Holding Ltd (AIAHL), a special purpose vehicle created to house Air India’s debt and assets.
The government’s attempt to divest a 76% stake in Air India in 2018 had failed, forcing it to sweeten the deal.
The national carrier’s current debt and liabilities stand at Rs 82,000 crore, of which Rs 60,000 crore is debt. Of this, the government has already taken on about Rs 29,400 crore of debt.
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