Airlines Indian government splits Air India into four parts for sale

In an interview with BloombergQuint, Jayant Sinha, minister of state for civil aviation, states that the government will offer at least 51% of each of the new formed companies.

Air India and its low cost subsidiary Air India Express will form the first new company. Air India operates a fleet of around 114 aircraft including Boeing 747-400, Boeing 777 and Boeing 787 long-haul aircraft. Air India Express fleet consists of around 23 Boeing 737-800 in a single-class configuration with 186 seats.

The regional carrier Alliance Air will be the second company and the MRO service provider Air India Engineering the third. Ground handling service provider Air India Air Transport Services should also be sold as a fourth separate company. Alliance Air operates regional flights from several bases in India with a fleet of two ATR42-500 and 13 ATR72-600.

In a next step the Indian government will call for Expressions of Interest for each of the four companies in the next week. Some days ago, the Indian government has announced that foreign companies are allowed to acquire up to 49% in parts of Air India.

Indian media reports, several international airlines could be interested in an investment in the Star Alliance carrier. Air India’s major competitor Jet Airways, in which Etihad has a 24% stake, is expected to bid for Air India. Additionally, the joint venture between the Indian company Tata Sons and Singapore Airlines, which already launched the Indian domestic carrier Vistara seems to be interested in Air India.