Air India to divest ground handling, MRO subsidiaries

Air India will hive off two of its subsidiaries – ground handling and maintenance, repair and overhaul – with effect from 1 February 2013, which will operate as separate profit centres.

Air India would, initially, absorb the capital expenditure of the two subsidiaries to help them stabilise their operations.

Air India Air Transport Services Limited (AIATSL) would undertake ground handling activities in various airports in India.  It will also expand its operations to service other carriers apart from Air India.

Air India Engineering Services Limited (AIESL) will, similarly, undertake engineering maintenance, repair and overhaul not only for Air India's fleet but also extend its services to other carriers.

The proposal to hive off these two units is a part of the turnaround plan of the national carrier, which has been duly approved by the cabinet committee on economic affairs. 

"From 1 February all employees working in the ground handling and maintenance facilities would be deputed to these independent companies, but the service conditions, emoluments and perks will remain unchanged," Air India said in a statement.