The Tata Group can continue to utilise land that Air India has at its two hubs — Delhi and Mumbai airports — for six months at the old agreements the government-run Maharaja had with DIAL and MIAL.
According to a report by TOI, Before the end of this July, the newly-privatised airline will need to enter into fresh commercial agreements with the airport operators for the land parcel they need to retain for operational reasons.
Being government-owned for decades and the biggest airline till the late 1990s, Air India, erstwhile Indian Airlines and their numerous subsidiaries have significant landholding at airports across India. They have a massive presence at Delhi and Mumbai airports.
The Union aviation ministry held meetings with stakeholders on the issue of land/space utilisation by AI and subsidiaries at airports.
On AAI land, all the civil structures and buildings of AI (currently owned by AI) will be transferred to AI Assets Holding Ltd (AIAHL). The current terms and conditions will prevail for the subsidiaries AIESL, AIASL, and Alliance Air as long as they remain public sector enterprises.
In the case of Air India, the same terms and conditions will be extended for six months after the closing date of operation. The subsidiaries must sign agreements directly with AAI, with an additional annexed document outlining the civil structures owned by AIAHL.
“All the civil structures and buildings of AI (currently owned by AI) on AAI land will be transferred to AI Assets Holding Ltd (AIAHL)…. For the subsidiaries AIESL, AIASL and Alliance Air, the existing terms and conditions shall apply as long as they remain public sector undertakings. In case of their disinvestment, the same terms and conditions are to be extended for six months from the closing date for continuity of business, as done in the case of Air India. Agreements are to be signed by the subsidiaries directly with AAI, with an additional annexure to specify the civil structures owned by AIAHL. A tripartite agreement to be made for the same,” an office order issued by the ministry says.
“As per conditions… about the transition period provided at DIAL and MIAL airports, the umbrella agreement with AAI to be extended for six months from the date of closing of the proposed transaction on similar terms and conditions made available to Al before divestment. Within the 6 months (after the closing of the transaction), the strategic investor will negotiate with AAI and sign a fresh agreement with mutually agreed commercial rates, which would be effective from a date six months after the closing date This would apply in case of both Air India and Air India Express,” it adds.
Comments were sought and are awaited from AI and airport operators on various issues like the landholding of the airline at various places and how much do they plan to retain.
Air India was taken over by Tata Group firm Talace on January 27. Through a competitive bidding process, the government sold loss-making Air India to Talace for INR 18,000 crore.
As part of the deal, Talace paid INR 2,700 crore in cash and took over the INR 15,300 crore debt of the airline. The remaining debt and borrowings of Air India were transferred to AIAHL.
(With Inputs from The Times of India)