Air India has put up for sale as many as 27 flats besides several residential and commercial land plots as well as office buildings across the country as part of its snail-paced asset monetisation plan amid the disinvestment process of the debt-ridden flag carrier. The state-run auctioneer MSTC has been mandated to e-auction these properties, with bid closing date fixed for September 6. According to a public notice, the airline has sought bids for sale of properties in Mumbai, Bengaluru, Kolkata, Chennai, Thiruvananthapuram, Ahmedabad, Pune, Goa, Lucknow, Gwalior, Gurgaon and Bhuj. Air India expects to mop up at least Rs 500 crore from the sale of these properties, which will go under the hammer in September, according to a senior airline official. Chalked out in 2012 as part of the national carrier’s Turnaround/Financial Restructuring Plan, which provides for equity infusion in the airline worth Rs 30,231 crore up to 2021, AI is required to monetise its assets and generate Rs 5,000 crore by way of sale, leasing or developing an asset as a joint venture.
However, so far, the carrier has been able to sell only four of its flats in Mumbai to SBI for about Rs 90 crore. As part of efforts to revive the national carrier, the Cabinet has given in-principle approval for divestment and the final contours are being worked out by a group of ministers, headed by Finance Minister Arun Jaitley. The group has been mandated to look into various aspects related to AI. It would look into the treatment of unsustainable debts of the national carrier, hiving off certain assets to a shell company and de-merger and strategic disinvestment of three profit-making subsidiaries, among others.
Recently, the government told the Parliamentary Standing Committee on Transport, Tourism and Culture a Parliamentary panel that Air India’s current business is “not sustainable” as it is neither able to generate enough cash flow nor start repaying even the principal amount on its debt. The airline’s total debt stood at Rs 48,876.81 crore at the end of March 2017, of which Rs 17,359.77 crore is aircraft loans and the rest Rs 31,517.04 crore capital loans.
The state-run airline’s net loss after tax narrowed to Rs 3,643 crore, while operating profit rose to Rs 300 crore in the last financial year.