Disinvestment of AI Engineering Services likely in 2023-24

The government is likely to complete the disinvestment of AI Engineering Services and AI Airport Services, engineering and ground handling units of the erstwhile national carrier Air India, in the financial year 2023-24, sources said.

According to an official source, the disinvestment process of AI Engineering Services Limited is in an advanced stage. The proposal has already been approved by a group of secretaries and the next stage is the approval by the government’s alternative mechanism on strategic disinvestment.

The alternative mechanism is essentially a group of ministers empowered to take certain decisions on behalf of the cabinet. It consists of Finance Minister Nirmala Sitharaman, Road Transport and Highways Minister Nitin Gadkari and ministers representing respective administrative departments. In this case, Civil Aviation Minister Jyotiraditya Scindia is a part of the ministerial panel.

The alternative mechanism is empowered to decide on the matters relating to terms and conditions of the sale. It will also take the call on the timing, price and other related issues as suggested by a group of secretaries.

AI Engineering Services Limited is India’s largest aircraft maintenance, repair and operations (MRO) company.

After the approval from the alternative mechanism, expression of interest will be invited from the potential buyers.

Rajiv Bansal, Secretary, Civil Aviation, last week said the government will invite expression of interest very soon. “Once this disinvestment goes through, hopefully, in a couple of months from now, this would augur well for the Indian aviation industry,” he said.

The disinvestment process of AI Airport Services, which provides ground handling services at 105 airports across the country, is also in the advanced stage.

Air India was sold to Tata Group in January 2022. The erstwhile national carrier had five subsidiaries – Air India Express, Air India Air Transport Services Ltd, Air India Engineering Services Ltd, Airline Allied Services Ltd, and Hotel Corporation of India Ltd.

Along with Air India, Tata Group has also acquired Air India Express. However, the government keeps control over the other four units.