Air India seeks to raise cash by selling prime foreign properties
28 April 2014
Cash-strapped national carrier Air India is looking to sell its properties abroad in countries like Hong Kong, Mauritius and Nairobi.
Reports citing AI officials say the airline has started consulting Indian banks and public sector companies for disposal of these properties, some in prime locations. The carrier is also in touch with the Indian High Commissions in these countries to find buyers for the assets.
Air India has already sold, leased or rented some of its prime properties in India and has also initiated the process to monetise other unutilised or surplus immovable assets.
The airline management is also negotiating with potential buyers for its properties in cities like Delhi and Mumbai. It is further exploring options to lease space in some of its booking offices for banks to install ATM outlets. The airline plans to start leasing out office space in Delhi and Mumbai and then extending it to other southern cities.
Airline officials said the move is part of its asset monetisation plan to rake in resources as part of airline's financial restructuring and turnaround strategy chalked out by the government earlier. Under the plan, the airline must raise an estimated Rs5,000 crore over a period of ten years, with an annual target of Rs500 crore from 2013-14 onwards.
To further cut its expenses on distribution and marketing costs, the carrier plans to develop its revenue through web- sales which at present contribute only 20 per cent of its total sales.
The airline will also offer discounts for a short term for those customers who directly book their tickets through their own website on international sectors. It plans to do this for online business seat bookings as well.
Air India's outstanding debt stood at a whopping Rs26,033 crore and its working capital loans were over Rs 21,125 crore as on 31 December last year.
The carrier earned a total revenue of Rs20,259.24 crore and incurred total expenses of Rs24,248.82 crore in 2013-14. It incurred an estimated loss of Rs3,989.58 crore for 2013- 14, which was lower than the Rs5,490.16 crore in 2012-13, Rs7,559.74 crore in 2011-12, and Rs6865.17 crore in 2010-11.