AI TO BE SPLIT IN FOUR PARTS

NEW DELHI: The government will split national carrier Air India into four separate companies and offer at least 51% in each of them as part of a divestment plan, Bloomberg reported on Monday.

The debt-laden airline would be divided into core airline business, regional arm, ground handling and engineering operations, the report added.

The core airline business comprising Air India and Air India Express, the low-cost overseas arm, will be offered as one company, and the process will be completed by the end of 2018, Bloomberg reported, Jayant Sinha, minister of state for civil aviation.

“The aviation sector is a very fast growing sector, with really exciting opportunities for all participants, so we felt all of this will unlock growth and competitiveness of Air India group,” Sinha told Bloomberg. “We expect it to be a very bright future for its employees.”

Last week, India had cleared a proposal to allow foreign investors to own up to 49 percent in the carrier. Air India could not be immediately contacted for comments.

“The aviation sector is a very fast growing sector, with really exciting opportunities for all participants, so we felt all of this will unlock growth and competitiveness of Air India group,” Sinha said.

“We expect it to be a very bright future for its employees.”

Sinha declined to name potential bidders but said management control will be retained by local investors. The government altered foreign investment rules last week, allowing foreign airlines to own as much as 49 percent .

The government will add most of the non-core debt owed by the carrier to its own balance sheet, while borrowings linked to core operations will be retained by the unit on offer, Sinha said. A so-called special purpose vehicle will hold the unsustainable debt of the airline and the government is making “every effort” to protect employees.