Aviation

Government seeks bids to sell 76% stake in Air India

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NEW DELHI: According to Times India Statement : Sixty-five years after Tata Group-founded Air India (AI) was nationalised, the government on Wednesday offered to sell 76% stake in AI to private bidders and effectively exit the airline business. Of AI’s total debt of Rs 50,000 crore, bidders for airline arm — AI, AI Express and AI-SATS (airport service company) — will have to take over debt of Rs 24,576 crore and liabilities of Rs 8,816 crore. The airline arm is being offered for sale first. TOI had first reported on March 6 that divestment of AI will begin with the airline arm being hived off first.

The iconic Nariman Point headquarters will not be associated with the “new AI” and only the central Delhi HQ at Airlines House will be given to the successful bidder to use for “two years or more”, while the ownership will remain with the government. Among “core real estate”, the bidder will get 21.8 acres hangar space at Delhi and Mumbai airports, said senior officials.

According to the preliminary information memorandum (PIM) issued on Wednesday, bidders need to have a minimum net worth of Rs 5,000 crore. Indian carriers with negative net worth, including all except IndiGo, will be considered to have zero net worth and can bid for the Maharaja, if they tie up with someone that can take the combined net worth to the required amount. This paves the way for an Indian carrier to tie up with a strong international player. Tata Sons-Singapore Airlines, IndiGo and an unidentified foreign player have already expressed interest in AI. Jet Airways was also waiting for the bid documents to decide on its next move and Qatar Airways wants to start an airline in India. They may also join the fray.

The successful bidder, expected to be finalised by September-end, will have to retain AI brand name for a specific period, which will be spelt out in the request for proposal. But a condition that AI has to be run on an “arm’s length basis” for at least three years, when it cannot be merged with any other entity and would need to maintain its identity as a separate airline, effectively means that the brand will have to be retained for at least that long.

The employees will need to be retained for at least a year. The government will carve out Esops from the 24% equity it will keep. Employees have also been allowed to participate in the bidding process, either directly or by creating a consortium.

Aviation

Aeroflot Buys Used Planes for Spare Parts Amid Sanctions

In the face of ongoing Western sanctions that have severely impacted Russia’s aviation industry, Aeroflot, the country’s largest airline, has devised a strategic plan to bolster its fleet’s spare parts inventory.

The airline is set to acquire five Boeing 737-800BCF freighters from Atran Airlines, a move that will allow it to dismantle the aircraft for critical components. The planes, which will be transferred to Aeroflot’s low-cost subsidiary Pobeda, will not be converted into passenger jets but instead will be stripped for valuable parts to support existing operations.

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Aeroflot’s plan to purchase these Boeing 737-800BCF freighters comes as part of a broader strategy to mitigate the effects of Western sanctions, which have crippled the Russian aviation sector. With the sanctions restricting access to essential aircraft parts and spare components, Aeroflot is exploring alternative ways to maintain and repair its fleet.

Instead of converting the freighters from cargo to passenger planes, a process deemed “unreasonably expensive” under current sanctions, the airline intends to focus on extracting high-value components such as engines, landing gear, avionics, and other essential systems.

The deal will be structured in a way that allows Aeroflot to indirectly purchase the freighters through an insurance settlement with the aircraft’s lessor, AerCap.

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The Russian government’s insurance company will reimburse the aircraft’s value, and the planes will then be leased back to local operators. This method circumvents some of the restrictions imposed by international sanctions while ensuring that the airline gains access to the necessary components to support its fleet.

By dismantling the aircraft for spare parts, Aeroflot aims to secure critical resources for the ongoing maintenance of its existing fleet. Components from the Boeing 737-800BCF freighters, such as engines and avionics, are expected to be reused in other aircraft within Aeroflot’s network, ensuring that the airline can keep its operations running smoothly