Work Begins To Sell India’s Only Government-Owned Airline

With Air India going to the Tatas, the Government of India could free itself of an airline it could not maintain and run properly. But Some of AI’s assets continue to remain under state control, and one of them is Air India’s former low-cost subsidiary Alliance Air. But recent reports suggest that it, too, may go down Air India’s path in the months to come.

Privatizing Alliance Air

The Indian government is keen on selling Alliance Air, the only airline it currently owns. According to a report by The Times of India, the central government has started getting all the formalities in place, involving government guarantees that were given to Alliance, so it could be ready to seek expression of interest.


Other formalities such as looking at the infrastructure available with other subsidiaries and issues such as workforce deployment are also being looked upon, according to officials familiar with the matter.

When Air India was offered to the Tatas, several of the airline’s subsidiaries remained with Air India Assets Holding Ltd (AIAHL) – a special purpose vehicle set up in 2019 for holding non-core assets and debt of Air India. Alliance Air was one of them.

One of many

The Indian government wants to recover some of the cash it spent on Air India by selling the carrier’s previous subsidiaries. Alliance Air, AI Engineering Services, and AI Airport Services come under this category.

It is speculated that the engineering arm could hold significant value from buyers, including the Tata Group, which is planning a massive expansion drive for Air India. The AI ​​Airport Services (AIASL), on the other hand, leave a lot to be desired, with Air India facing several problems with its services and voicing strong disappointment recently.

Separate entity

It’ll still take months before the government can get everything sorted to even begin the process of selling Alliance Air, but there have been several developments over the last few months, including perhaps the biggest of them all – the formal separation of Alliance Air from Air India.

In April, almost three months after Air India’s privatization, Alliance Air announced that it had completed the process of becoming a standalone airline, which meant that it no longer relied on AI’s network of bookings, customer service, or anything else.

Alliance Air currently operates a fleet of 19 aircraft, 18 of which are ATR72-600. It operates more than 100 daily flights across various regional networks, with a special focus on North-East India.

The carrier will soon take deliveries of the smaller ATR 42 aircraft. Photo: ATR Aircraft

The airline is also expecting to induct two smaller ATR 42 airplanes to widen its reach and operate in challenging airfields in the mountainous regions of North India.

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Source: The Times of India

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