New Delhi: The government will split state-run carrier Air India into four separate companies and offer at least 51 percent in each of them as part of a divestment plan proposed by the government, Bloomberg reported on Monday.
The debt-laden airline would be divided into core airline business, regional arm, ground handling and engineering operations, the report added.
The core airline business comprising Air India and Air India Express, the low-cost overseas arm, will be offered as one company, and the process will be completed by the end of 2018, Bloomberg reported, quoting Junior Aviation Minister Jayant Sinha.
The government last week allowed foreign airlines to own up to 49 percent stake in national carrier Air India at a time when the process for strategic disinvestment of the debt-laden airline is on.
While allowing foreign investors, including overseas airlines, to have stake in Air India, the government has also made it clear that the national carrier's substantial ownership would remain with an Indian national.
A group of ministers is in the process of finalising the contours for the proposed strategic stake sale in the national carrier and expression of interest is likely to be invited from bidders soon.
Foreign airlines were allowed to invest under government approval route in the capital of Indian companies operating scheduled and non-scheduled air transport services, up to the limit of 49 per cent of their paid-up capital.
The provision was not applicable to Air India.
Surviving on taxpayers' money, Air India is estimated to have a debt burden of more than Rs 50,000 crore. Various efforts are being made to improve the financial performance of the national airline, including by way of sale of non-core assets.
Under a turnaround plan approved by the previous UPA regime, Air India is to receive up to Rs 30,231 crore from the government subject to meeting certain performance thresholds.
The ten-year bailout package began from 2012.
With Agency Inputs