Air India may bid for AIESL with Lufthansa Technik, Air France-KLM

AIESL is the maintenance repair and operations company, owned by Centre, which caters largely to Air India's fleet

Air India is eyeing a partnership with Germany-based Lufthansa Technik and French-Dutch Air France-KLM's engineering unit to bid for Air India Engineering Services Ltd (AIESL), a report by The Economic Times (ET) said.

AIESL is the maintenance, repair and operations company which caters largely to Air India's fleet. It was an arm of Air India when the airline was owned by the Centre. Now that Air India has gone to the Tata Group, AIESL is owned by the government, which has aimed to put it up for sale. AIESL is necessary for Air India to ensure its fleet is smoothly run.

According to reports, the Preliminary Information Memorandum (PIM) of AIESL is awaiting the approval of a panel of senior ministers headed by home minister Amit Shah. It will be followed by the floating of an Expression of Interest (EOI) to invite bids.

"India is a highly dynamic growth market and extreme growth of air traffic will drive up the demand for MRO services. We are already present and successful on the Indian subcontinent with our own facility for component services and taking a very close look at this development, to participate even more strongly in this growth market," a spokesperson of Lufthansa Technik told ET.

Campbell Wilson, chief executive officer (CEO) of Air India, had earlier said that the exclusion of AIESL from the deal between Tatas and the Centre has created difficulties for the airline.

"What was one of the negative surprises with privatisation is that Air India's engineering capabilities disappeared. AIESL will provide services till the end of next year. But what happens after that is a matter of deep consideration, given our expansion," Wilson had said.

He added that 90 per cent of Air India's engineering work is being done by AIESL.