Air India Maharaja is selling off trinkets to stage comeback
Air India has often been cited as the white elephant of Indian government, you can't let go of it but every day that you decide to keep it, you know it's going to eat into your income. After several talks of re-branding and rejigging, the national carrier has now finally decided to put out some of its assets for sale. Here's all about it.
What is going to the auction block?
Air India is planning to sell some of its land assets and seven properties to garner around Rs. 80 crore under its asset monetization plan and has asked state-run auctioneer MSTC to start the proceedings. The e-auction notice reads "Air India proposes to sell its exclusive properties in the form of land parcels/built-up flats located at prime location in Mumbai, Bengaluru and Trivandrum."
Another attempt towards revival
This is part of the financial restructuring plan, okayed by the Cabinet Committee to inject fresh breath of life into the ailing airlines. The national carrier will have to generate Rs. 5,000 crore by monetizing its assets via sale, lease or development through joint ventures. It will also get financial backing of Rs. 30,000 crore for ten years to get back on its feet.
Present plan of action
Air India has several properties that have not been utilized over the years both in India and overseas. It has also leased four flats in Mumbai to SBI for Rs. 90 crore and its erstwhile headquarters in Nariman point to government agencies and is also in the process of giving 25,500 sqft space at its Kolkata office complex on lease to aid its revival.
Will it work this time?
Although the Maharaja may have been touted as the crown jewel in the past, it has fallen from grace for a pretty long time. While carriers, such as Indigo and JetAirways, have been posting decent profits; the national carrier has drawn up loans of around Rs. 50,000 crore. It would be a miracle if it bounces back and actually starts showing sustained profits.
The murky debt-trap of Air India
Even Civil Aviation Minister Ashok Gajapathi Raju is not sure of Indian Airlines' revival. In an interview with The Hindu, regarding the future of Air India, he said, "First of all, has it come anywhere near profitability? It's nowhere near that. The turnaround and the financial restructuring plan have all come in. What is the result? Has it come out of the debt-trap?"
There is always hope
However, Minister of State Civil Aviation Jayant Sinha is undaunted and even optimistic. He told The Hindu, "I think Air India has a terrific future ahead of itself because India does need a great global airline like British Airways, Lufthansa, Qantas or Emirates and we think that Air India, in that regard, has a winning strategy to become a great global airline for India."