Govt begins privatization of Alliance Air, other ex-AI subsidiaries

Wednesday 03rd August 2022 06:45 EDT

After Air India, the government has now begun work on privatising its erstwhile subsidiaries - regional carrier Alliance Air Aviation, AI Engineering Services and AI Airport Services.

India’s civil aviation ministry has begun a clean-up exercise, involving government guarantees that were given to Alliance Air. Additionally, it will look at the infrastructure available with the other two subsidiaries and the HR issues, including manpower deployment, which will pave the way for seeking expression of interest over the next few months.

The sale of the entities will help the government garner some resources and recover some of the money it had pumped into Air India before it was sold. Of them, the engineering arm could see the maximum interest from potential buyers as the Tata Group has major fleet expansion plans, said people in the know. A few renowned international airlines with large engineering subsidiaries are keen to forge alliances with Tatas to jointly run the maintenance shop here.

Alliance Air currently has a fleet of 19 turboprops - 18 ATRs and a made-in-India Dornier of HAL - and operates 115 daily departures on a network of 50 domestic destinations mainly in north and Northeast India. The 800-employee-strong airline will induct two more ATRs by September and another HAL-made Dornier. The regional carrier plans to start an international route - Chennai-Jaffna - soon, depending on the situation in Sri Lanka.The handing over of AI to Tatas this January, has so far been the most high-profile divestment of the Modi government.

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