After Air India, Centre to put regional carrier Alliance Air on the block

Alliance Air was a fully-owned subsidiary of Air India but the government spun it off when it divested stake in AI

The Centre is pursuing its divestment goal in full force as it plans to sell its stake in regional airline Alliance Air to earn close to Rs 14,700 crore.

“Alliance Air, which is part of Air India Asset Holdings Pvt Ltd (AIAHL), will also be monetised and the earnings would be used to pay off debt,” a senior government source told The Economic Times.

Alliance Air was a wholly-owned subsidiary of Air India, which was bought by the Tata Group last week. Alliance Air was not a part of the deal and was instead transferred to AIAHL, the special purpose vehicle that holds Air India’s remaining assets.

“While the sale of the building and other assets is set to fetch Rs 14,700 crore, monetising the ground handling, engineering subsidiaries and Alliance Air is expected to fetch over Rs 2,000 crore more,” another source is quoted as saying in the report.

Alliance Air operates air services to 47 destinations with a fleet of 18 ATR 72-600 (70/72 Seater) aircraft. Flights are operated mostly to Tier-2 and Tier-3 Cities or those which link these cities to the metro hubs.

The regional airline made an operating profit of Rs 65.09 crore in FY20. Regional carriers may be interested in Alliance Air due to the government’s regional connectivity scheme, sources added.

Salt-to-software conglomerate Tata Group was on Friday declared the winner of the bid for the debt-ridden national carrier Air India, as it pipped a consortium led by SpiceJet Chairman Ajay Singh.

Check out DH's latest videos