Three-Pronged Strategy Cleared For Air India Disinvestment

Three-pronged Strategy Cleared For Air India Disinvestment

The Cabinet committee of economic affairs (CCEA) has finalised a three-pronged strategy for the disinvestment of Air India — demerger and strategic disinvestment of three profit making subsidiaries, hiving off of certain assets into a special purpose vehicle and treatment of unsustainable debts of the ailing carrier. The three profit-making subsidiaries are the low-cost airline Air India Express Ltd, the ground handling company Air India Air Transport Services Limited and Air India’s joint venture with SATS Limited for ground handling activities in Delhi, Mumbai, Trivandrum and Bengaluru.

The process will be piloted by the Air India Specific Alternative Mechanism (AISAM) comprising finance minister Arun Jaitley, civil aviation minister Ashok Gajapathi Raju, transport minister Nitin Gadkari, Railways minister Suresh Prabhu and power minister Piyush Goyal. In addition to laying a roadmap to take care of the massive debt that Air India has incurred over the years, the assets that are to be incorporated in the ‘shell companies’, the committee will also decide on the quantum of disinvestment of the parent company and its subsidiaries and take decisions about the bidders. The decision was taken at a CCEA meeting on June 28. Read More…

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