Government could sell Alliance Air as well: Check details here
Hot on the heels of national carrier Air India's sale to Tata Sons, the government is reportedly likely to sell state-run regional airline Alliance Air. Alliance Air and its ground-handling unit and engineering subsidiaries are expected to fetch Rs. 2,000 crore together, while the smaller airline's buildings and other assets could fetch an additional Rs. 14,700 crore. Here are more details about this.
Alliance Air was not mentioned on Friday when DIPAM Secretary Tuhin Kanta Pandey announced the offloading of a 100% stake in Air India and Air India Express. Pandey also announced offloading a 50% stake in ground-handling company Air India SATS Airport Services Private Limited. According to an Economic Times report, Alliance Air would also be sold as a part of the government's divestment drive.
Alliance Air is a wholly-owned subsidiary of Air India. The funds from its sale will reportedly be used to pay off debt. Alliance Air operates 19 small ATR aircraft that connect 48 locations around India. It reportedly turned an operating profit of Rs. 65.09 crore in FY20 and a net loss of Rs. 201 crore in the same period.
Alliance Air is expected to attract interest from regional carriers that grew when the Centre announced its UDAN Regional Connectivity Scheme. Of its subsidiaries, the ground-handling unit is known to turn profits while the engineering subsidiary is infamous for generating losses that usually offset the former's gains. The profit-loss equation didn't stop Alliance Air from commencing international operations with a flight to Sri Lanka.
Meanwhile, the focus remains on the scale and details of the Air India-Tata Sons deal. As of August 31, Air India was Rs. 61,562 crore deep in losses, of which Rs. 15,300 crore was taken over by the Tatas. The remaining debt will be transferred to Air India Assets Holding Limited (AIAHL) that houses Air India's assets and liabilities, including Alliance Air.