The Indian government is planning to sell its stakes in Air India’s subsidiaries, including Air India Air Transport Services (AIATS), Airline Allied Services (AAS) or Alliance Air, AI Airport Services (AIAS), Air India Engineering Services Limited (AIESL), and Hotel Corporation of India (HCI), to meet its fiscal divestment targets for FY26. The government aims to invoke Expressions of Interest (EoIs) by August 2025 and complete the sale by the end of the year.
The subsidiaries, currently held by Air India Assets Holding Limited (AIAHL), are Air India’s non-core assets, debt, and subsidiaries earmarked for sale. The government had earlier planned to divest these entities in 2017, but the process has been delayed, and it now aims to speed up the process.
The government has already conducted roadshows for AIESL, the largest maintenance, repair, and overhaul (MRO) company, and attracted interest from international investors. The upcoming roadshows in Singapore and Europe aim to attract more investors and participate in the stake sale.
The subsidiaries up for sale hold strategic importance in India’s aviation ecosystem, providing services such as MRO, ground handling, airport operations, and hotel management. The government has announced the recruitment of a CEO for Hotel Corporation of India to strengthen its leadership and improve operational efficiency ahead of the sale.
The government’s approach to divestment has shifted from aggressive targets to a more measured approach, focusing on asset sales rather than privatization. The Department of Investment and Public Asset Management (DIPAM) has facilitated IPOs and stake sales in public sector enterprises, raising Rs 13,728 crore in 2024.
Potential bidders, including global aviation firms, have expressed interest in acquiring AIESL. The government’s sale of Air India’s subsidiaries is seen as a crucial step in aviation sector reforms, and the process will be crucial in shaping the future of these key aviation assets.