Bird Group interested in acquiring Air India's ground handling business

Aviation service provider Bird Group has shown interest to bid for Air India’s ground handling unit Air India Air Transport Services Limited (AIATSL).

A Bird Group spokesperson confirmed the development and said it has written to the ministry of civil aviation expressing interest to buy 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 that the group has sent an expression of interest (EoI) for the same.

Bird Group provides services such as business jet, aircraft navigation, ground handling, customer management and logistics.

Sources said that Air Works, a private maintenance repair and overhaul (MRO) company, has also shown interest to take over the ground handling business of the state-owned carrier.

India's largest airline, IndiGo, also went public about their interest to buy the airline's international business.

A senior Air India official said that it makes sense to sell the subsidiary separately as they themselves will command good value, which can be used to reduce the debt.

Air India’s debt at the end of 2016-17 stood at Rs 48,876 crore, of which Rs 31,517 crore (65 per cent) was related to working capital.

The official said that AIATSL would command a value of around Rs 2,000 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 Rs 3,000 crore. Significant among them is the Nagpur facility, which has an engine workshop valued at around Rs 1,330 crore, and Shamshabad facility at Rs 200 crore. Besides, it also has workshop equipment valued at around Rs 200 crore and a large base of skilled engineers.

Assets and Liabilities

Profitable units
 

• Air India Air Transport Services provides ground handling services

• Air India SATS provides ground and cargo handling services 

• Air India Express is a low-cost carrier. Also includes Air India Charters

Loss-making units
 

• Hotel Corporation of India owns two 5-star Centaur hotels in Delhi & Srinagar

• Alliance Air operates flights to 37 destinations in India

• Air India Engineering Services runs aircraft maintenance facilities at six airports 

Source: Reuters
 

A group of ministers led by Finance Minister Arun Jaitley will decide on the modalities of Air India's disinvestment process.

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.