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Keep profitable AI subsidiaries out of disinvestment: Gadkari

Press Trust of India  |  Nagpur 

As Engineering Services Limited (AIESL) today announced induction of first third-party aircraft for major maintenance work at its MRO unit, Union Minister said profit-making subsidiaries of should be kept out of proposed privatisation.

The announcement of the induction of SpiceJet's Boeing737 for "C checks" at the maintenance, repair and overhaul (MRO) facility was made here in the presence of Civil Aviation Minister Ashok Gajapathi Raju, Gadkari and Chief Minister Devendra Fadnavis.


Chairman and Managing Director, Ashwani Lohani and chairman, Singh were also present.

Gadkari, the Minister for Road Transport, and Shipping, is part of the five-member ministerial panel, headed by Minister Arun Jaitley, tasked with deciding on the process of privatising

"I would urge the aviation minister that the subsidiary running the MRO is kept different from its parent, because if a decision on (stake sale) is taken, I hope this company also doesn't go to some other party. Any business that is profitable should be encouraged by the government," Gadkari said.

On June 28, the Cabinet Committee on Economic Affairs gave in-principle approval for considering strategic disinvestment of and five of its subsidiaries.

Gadkari also urged to launch services from to destinations such as Bengaluru, Chennai, Hyderabad, Kolkata and Delhi, saying there is a huge untapped traffic potential from the city.

Responding to Gadkari's remarks, Raju said that any suggestions on were welcome, and if they had come from a colleague (Gadkari), they had to be taken "seriously".

"But we all need to work together," he added.

Later, when asked about Gadkari's views, Raju said, "The discussion on Air India's divestment is an ongoing process and his comments are welcome."

This is the first major maintenance work to be carried out for any external party at the MRO facility, which will be completed in six days.

"Once the capacity at the MRO facility is fully utilised, it will create thousands of jobs," Raju said, expressing hope that foreign airlines will also avail of the MRO services here.

chairman Singh said the airline is planning to make one of its hubs for operations, and launch air services from the city.

Built over 50 acres of land in MIHAN special economic zone, the MRO unit was set up as a joint initiative between the and the US aircraft maker, The Boeing Company, in 2010.

Besides maintaining Air India's Boeing aircraft fleet, it has the mandate to carry out third-party works too.

AIESL is working aggressively to expand its foot print in the high-growth potential MRO segment as most of the private airlines carry out these works overseas.

So far, and Boeing have invested around USD 116 million in the facility. Of this, about USD 107 million has been invested by Boeing alone.

AIESL had signed an agreement with the for C1, C2 and higher checks to be carried out on latter's Boeing 737 -800/900 aircraft in September last year.

The contract is worth USD 6 lakh per year and is valid for three years with assured 100 days of work each year.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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