Exclusive: Air India board to finalise contours of Alliance Air sale

The Air India Board is set to consider a proposal for the sale of its low-cost subsidiary, Alliance Air.

Government sources have told Business Today TV that the Air India Board is scheduled to meet on Thursday to formally consider the proposal, among other items on the agenda. The meeting will be chaired by Air India Board chairman Rajiv Bansal, who is also the Secretary of the Union Ministry of Civil Aviation.

"Some terms of the proposal require further discussion. The plan is to divest the entire 100 per cent shareholding. It is expected that the formal Board nod will happen at the meeting," sources said.

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The government had on October 8 announced that Talace Pvt Ltd, a wholly-owned subsidiary of Tata Sons had won the bid to acquire debt-laden national carrier Air India for around Rs 18,000 crore. 

This includes a cash payment of Rs 2,700 crore and the takeover of Rs 15,300 crore debt. The Tatas will also take on additional Rs 9,185 crore worth of lease obligations on account of 42 aircraft that are with the airline.

The finance ministry expects the Alliance Air sale, along with the divestiture of other subsidiaries and non-core assets, to fetch a total of Rs 17,000 crore.

Alliance Air is a fully owned regional subsidiary of Air India. It currently operates a fleet of 19 ATR planes that connect 48 destinations. The flight schedule of Alliance Air is structured in a manner that enables regional connectivity of tier-2 and tier-3 cities.

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