
Debt-laden airline Air India could be divided into four businesses with at least 51 percent of each offered for sale.
In an interview with Bloomberg, junior aviation minister Jayant Sinha said that Air India and its low-cost subsidiary Air India Express will form the core airline business and be offered as one entity.
The other three companies would be its regional arm, ground handling and engineering operations. It is expected that the process will be completed by the end of 2018.
“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 competitiveness of Air India group,” Sinha said. “We expect it to be a very bright future for its employees.”
The announcement comes a week after the Indian cabinet relaxed its rules around foreign ownership of Air India allowing overseas entities to own up to 49 percent of the carrier.
The government said it would lead to larger FDI inflows, contributing to growth of investment, income and employment.
Ministers had previously claimed that splitting Air India into parts could decrease its total valuation. However, the latest comments from Jayant Sinha appear to show that the government has altered its stance.