COMING APART: Air India will be split into four business units

17 JAN 2018: The government of India has confirmed that Air India will be carved up into four separate entities ahead of its sale. The debt-laden national carrier will be offered for sale as the mainline airline business, a regional airline unit, a ground handling division and engineering operations.

The core airline business is made up of Air India and Air India Express and the pre-sale disinvestment process will be completed before the end of the year, said union minister of state for civil aviation Jayant Sinha.

The government also cleared foreign investors to own up to 49 percent in the state-run carrier.

Investors’ interest is required by the end of this month and the government is then likely to open its books to preferred bidders.

A big obstacle for any serious investor is taking on a bloated airline business with too many employees.

The government still hasn’t approached the tricky subject of staff retention, but is said to be considering large scale voluntary retirement packages and transfers to other state owned enterprises to help push through a sale.

However, minister Sinha says once deals have been struck, the airlines business can look forward to a successful future as a private enterprise with the right management in place.

“The aviation sector is a very fast growing sector, with really exciting opportunities for all participants, so we felt all of this will unlock growth and the competitiveness of Air India. We expect it to be a very bright future for its employees.”