Expression of Interest for the sale of AIESL likely be issued by Jan-Feb 2023

Air India, fleet expansion

The Modi government may issue an Expression of Interest (EoI) request for the sale of AIESL (Air India Engineering Services Ltd.) by Jan-Feb 2023. When Air India was given back to Tatas, a number of the airline’s subsidiaries were still under the control of Air India Assets Holding Ltd.

Despite the fact that Air India changed ownership, four of its subsidiaries, including AI Engineering Services Ltd (AIESL), AI Airport Services Ltd (AIASL), Alliance Air Aviation Ltd (AAAL), and Hotel Corporation of India Ltd (HCL), as well as non-core assets like artwork and artifacts, were not included in the transaction.

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The privatization of AIESL and AIASL has begun, following the Indian government’s long-standing desire to sell these assets as well. An EoI request, as a result, might be issued by the Government for the sale of AIESL by Jan-Feb 2023.

ALSO READ – Centre begins work on privatisation of Alliance Air & other Air India subsidiaries

On January 27, almost 69 years after it was taken from the conglomerate, the Indian government transferred ownership of Air India to the Tata Group.

According to people aware of the development, the Department of Investment and Public Asset Management (DIPAM) held roadshows for AI Airport Services (AIASL) and AI Engineering Services (AIESL) in September to gauge interest from potential bidders. The consulting company EY will be the transaction advisor for the sale process. 

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According to industry sources, prominent participants attended the road shows. Several significant international firms, like Swiss ground handling company Swissport and Turkish firm Celebi Aviation Holding, participated in the ground handling unit alongside Indian firms like the Bird group and Tata Sons. Tata Sons and the Adani group also took part in the roadshow for AI Engineering Services.

According to government officials, these roadshows are being organized to get feedback from the business so that the EoIs can be written to generate more reactions. Additionally, two organizations have been chosen to physically inspect and tag the assets of the two corporations that are spread across Indian airports.

The roadshow for AI Engineering Services included participation from Tata Sons and the Adani Group, as well

In the meantime, business leaders believe that the Centre should quickly put both businesses up for sale because they benefit from having Air India as their main client.

A three-year lock-in period applies to the share purchase deal that was made between Tata Sons and the government during Air India’s disinvestment, during which time the airline must continue to operate its operations with the ground handling and engineering unit.

An executive of an aircraft maintenance company stated that AIESL has expertise in a variety of fields, including base maintenance, line maintenance, and component overhaul services. It said, “AIESL is a great asset with a trained workforce and certification from major global original equipment manufacturers. We expect global companies to bid for the same.”

Airline Allied Services, or Alliance Air, is one of the four subsidiaries of Air India (AI)

Four of Air India’s former subsidiaries, AI Air Airport Services, AI Engineering Services, Airline Allied Services or Alliance Air, and Hotel Corporation of India, along with non-core assets and other non-operational assets, were transferred to a special purpose vehicle called AI Assets Holdings as part of the disinvestment process.

Around January or February of the next year, the Central Government may issue an Expression of Interest (EoI) for the sale of AIESL. However, according to the sources, it might take longer to complete plans to sell the ground handling division of Air India Airport Services Ltd. (AIASL).

(With inputs from CNBC-TV18)

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