Air India: Government launches road show for Air India ground handling and engineering companies

The Center plans to invite expressions of interest (EoI) for Air India’s former ground handling and engineering units by November as it aims to close the deal this fiscal year, people have said. knowing the subject.

The Department of Investment and Public Assets Management (DIPAM) started last week to organize road shows with potential buyers for AI Airport Services Private Limited (AIASL) and AI Engineering Services Limited (AIESL) to assess the interest of bidders. The consulting firm EY is the transactional advisor of the process.

Industry sources said the roadshows saw the participation of major players. While there has been the involvement of Indian companies such as Bird Group and Tata Sons for the ground handling unit, it has also attracted interest from large international companies like the Swiss ground handling company Swissport and the Turkish company Celebi Aviation Holding.

The roadshow for AI Engineering Services also saw participation from Tata Sons and the Adani Group, sources familiar with the development said.

The companies did not respond to questions.

Government officials said the roadshows are organized to gather industry feedback so that the EOI can be designed to get more responses.

“We want to incorporate industry feedback to make the sales process quick and easy. The businesses have been profitable and are very attractive with a presence across India and a trained workforce ready to go,” a government official said.

As part of the process, two agencies have been appointed to physically check and tag the assets of the two companies that are at airports in India.

Industry executives ET spoke to said the government should put the two companies on the block as soon as possible, as the companies derive values ​​from Air India being their biggest customer.

As part of the share purchase agreement reached between Tata Sons and the government during the Air India divestiture, there is a three-year lock-up period during which Air India is required to continue its business with the ground handling and engineering unit.

“While both companies have their inherent strengths, having Air India as one of the customers will increase the value of both companies, resulting in more competitive bidding and government gains. Therefore, the government should proceed very quickly with the sale of the two companies,” said an executive of a ground handling company.

AIASL offers ground handling at most Indian airports except for Delhi, Bengaluru, Hyderabad, Mangalore and Thiruvananthapuram.

An executive from an aircraft maintenance company said that AIESL has expertise in all areas, such as base maintenance, line maintenance or component overhaul services. “AIESL is a strong asset with a trained workforce and certification from major global original equipment manufacturers. We expect global companies to bid for the same,” he said .

As part of Air India’s divestiture process, four of its former subsidiaries — AI Air Airport Services Ltd (AIASL), Airline Allied Services Ltd (AASL) or Alliance Air, AI Engineering Services Ltd (AIESL) and Hotel Corporation of India Ltd (HCI) – along with non-core assets like real estate, paint and artifacts, and other non-operating assets, were transferred as a special purpose vehicle AI Assets Holdings Limited.

About 75% of Air India’s debt has also been assigned to the SPV and the government will try to clear some of it through the sale of subsidiaries and other non-core assets.

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