Bird Group, Air Works in race for AI's ground handling unit
31 August 2017
While there is no sign of a decision yet on the privatisation of national carrier Air India, aviation service provider Bird Group has shown interest in bidding for AI's ground handling unit Air India Air Transport Services Limited (AIATSL).
Confirming this, a Bird Group spokesperson said they have written to the ministry of civil aviation expressing interest in buying AIATSL. "We have told the government that if it decides to sell the subsidiary separately to unlock maximum value, we will bid for the ground handling unit," said a company official.
Earlier, civil aviation secretary Rajiv Nayan Choubey told reporters in New Delhi that the group has sent an expression of interest (EoI) for AIATSL.
Bird Group provides services such as business jets, aircraft navigation, ground handling, customer management and logistics.
According to Business Standard, sources said that Air Works, a private maintenance repair and overhaul (MRO) company, has also shown interest in taking over the ground handling business of the state-owned carrier.
India's largest airline, IndiGo, also went public about their interest in the airline's international business.
A senior Air India official said that it makes sense to sell the subsidiaries separately as they independently will command good value, which can be used to reduce the airline's massive debt.
Air India's debt at the end of 2016-17 stood at Rs48,876 crore, of which Rs31,517 crore (65 per cent) was related to working capital.
The official said that AIATSL would command a value of around Rs2,000 crore. ''AIATSL is entitled to carry out ground handling services at all airports across India, and any airline will be ready to pay a premium for this,'' the official said.
In the case of Air India Engineering Service Limited (AIESL), it has 31 hangars throughout the country. The company pegs its value at Rs3,000 crore. Significant among them is the Nagpur facility, which has an engine workshop valued at around Rs1,330 crore, and the Shamshabad facility at Rs200 crore. Besides, it also has workshop equipment valued at around Rs200 crore and a large base of skilled engineers.
A group of ministers led by finance minister Arun Jaitley will decide on the modalities of Air India's disinvestment. A decision on Air India will be taken after completing due process, but it needs to be done "expeditiously'', Jaitley told reporters on Wednesday, according to a Reuters report.
Prime Minister Narendra Modi had approved the plan to privatise Air India in June.