NEW DELHI- The Indian government is preparing to sell its stakes in Air India (AI) subsidiaries, aiming to gauge investor interest through roadshows in India, Singapore, and Europe.
These companies, including Air India Air Transport Services (AIATS), Airline Allied Services (AAS) or Alliance Air, AI Airport Services (AIAS), Air India Engineering Services Limited (AIESL), and Hotel Corporation of India (HCI), are currently held by a special purpose vehicle (SPV), Air India Assets Holding Limited (AIAHL).
With an aim to meet its fiscal divestment targets for FY26, the government is expediting the process, planning to invite Expressions of Interest (EoIs) by August 2025 and complete the sale by year-end.
Photo: Sandeep/ atc spotterAir India Former Subsidiaries Sell
According to Moneycontrol, the central government has prioritized the sale of Air India’s former subsidiaries to streamline its divestment strategy and meet fiscal targets.
These entities remained under government control even after the sale of Air India to the Tata Group in 2021.
AIAHL was established in 2019 to manage Air India’s non-core assets, debt, and subsidiaries earmarked for sale.
In 2017, the government approved their divestment, estimating revenue generation of approximately Rs 3,000 crore. However, the process has seen multiple delays, necessitating renewed efforts in 2025.
Last year, roadshows for AIESL, India’s largest maintenance, repair, and overhaul (MRO) company, were conducted in Mumbai, leading to the approval of its divestment by a Group of Ministers (GoM).
The upcoming roadshows in Singapore and Europe aim to attract international investors for broader participation in the stake sale.
Photo: Bhavya Velani/Aviation A2ZSubsidiaries Up for Sale
The subsidiaries identified for divestment hold strategic importance in India’s aviation ecosystem:
- AIESL (Air India Engineering Services Limited): Provides MRO services and handled around 450 aircraft in 2022-23. Despite a revenue increase to Rs 2,029.86 crore, its net profit declined from Rs 829.26 crore in FY22 to Rs 629.51 crore in FY23.
- AIATS (Air India Air Transport Services): Offers ground handling services across Indian airports and to international carriers.
- AIAS (Air India Airport Services): Engaged in airport operations and management.
- AAS (Alliance Air): Operates regional domestic flights under the government’s UDAN scheme.
- HCI (Hotel Corporation of India): Manages hotels and in-flight catering through Chefair, with units in Delhi and Mumbai.
To strengthen HCI’s leadership, the government recently announced recruitment for a CEO position, signaling a structured approach to improving operational efficiency ahead of the sale.
Photo: Narendra ModiShifting Approach to Divestment
Unlike previous years where specific disinvestment targets were set, the 2025 Union Budget introduced a broader Rs 47,000 crore capital receipts target, combining divestment and asset monetization.
This reflects a moderated approach toward privatization, focusing on measured asset sales rather than aggressive targets.
In FY25, the Department of Investment and Public Asset Management (DIPAM) facilitated IPOs for MSTC and IREDA, while offloading minor stakes in public sector enterprises such as HAL, Coal India, and RVNL, raising Rs 13,728 crore.
Potential bidders, including leading global aviation firms, have expressed interest in acquiring AIESL.
In 2024, Tata-owned Air India reportedly explored partnerships with Lufthansa Technik and Air France-KLM’s engineering arm for a potential stake purchase in AIESL.
Third-party ground handling firms have also called for a competitive landscape. Celebi Aviation’s India and Southeast Asia President, Murali Ramachandran, emphasized the need for a level playing field, stating that AIAS benefits from legacy agreements with Air India, making it difficult for new entrants to compete.
He urged the government to ensure fair competition and avoid policies favoring domestic airlines in ground handling operations.
Photo: Utkarsh Thakkar (Vimanspotter)Bottom Line
The government’s renewed divestment push for Air India’s former subsidiaries marks a crucial step in aviation sector reforms.
By engaging international investors through strategic roadshows and ensuring a competitive bidding process, the government aims to maximize valuation while facilitating industry growth.
With Expressions of Interest set to open by August 2025, the coming months will be pivotal in shaping the future of these key aviation assets.
Stay tuned with us. Further, follow us on social media for the latest updates.
Join us on Telegram Group for the Latest Aviation Updates. Subsequently, follow us on Google News
Air India Likely to Fly First Boeing 787-9 to Seattle and Los Angeles | Exclusive
The post Air India Ex-Subsidiaries Sell: Govt Plans Roadshows in Europe and Singapore appeared first on Aviation A2Z.
