Air India puts overseas assets on block to raise funds

Cash-strapped Air India is looking for buyers in order to sell its prime properties abroad in countries like Hong Kong, Mauritius and Nairobi.

Accoridng to sources, the airline has started the consultation process with Indian banks and public sector companies for disposal of these properties including floor space in prime locations. The carrier is in touch with the Indian High Commissions in these countries to find buyers for the assets.

Air India has already sold, leased or rented out some of its prime properties in India and has also initiated the process to monetise other unutilised or surplus immovable assets.

The airline management is also negotiating with potential buyers for its properties in cities like Delhi and Mumbai.

The carrier is also exploring options to lease space in some of its booking offices for banks to install ATM outlets.

The airline plans to start leasing out office space in Delhi and Mumbai and then extending it to other southern cities.

Airline officials said the move is part of its asset monetisation plan to rake in resources as part of airline's financial restructuring and turnaround strategy chalked out by the government earlier. Under the plan, the airline must raise an estimated Rs 5,000 crore over a period of ten years, with an annual target of Rs 500 crore from 2013-14 onwards.

To further cut its expenses on distribution and marketing costs, the carrier plans to develop its revenue through web- sales which at present contribute only 20 per cent of its total sales. The airline will also offer discounts for a short term for those customers who directly book their tickets through their own website on international sectors. It plans to do this for online business seat bookings as well. Air India's outstanding debt stood at a whopping Rs 26,033 crore and its working capital loans were over Rs 21,125 crore as on December 31 last year.

The carrier earned a total revenue of Rs 20,259.24 crore and incurred total expenses of Rs 24248.82 crore in 2013- 14. The airline incurred an estimated loss of Rs 3989.58 crore for 2013- 14, which was lower than Rs 5490.16 crore in 2012-13, Rs 7559.74 crore in 2011- 12 and Rs 6865.17 crore in 2010-11.

Courtesy: Mail Today