Air India to hive off two subsidiaries

Indo Asian News Service

Mumbai, Jan 30 (IANS) As part of its turnaround plan, Air India will hive off two of its subsidiaries from Friday, an official said here Wednesday.

The national carrier's ground handling and maintenance, repair and overhaul will be operated as separate profit centres Feb 1.

Under this, Air India Air Transport Services Ltd. (AIATSL) will take over ground handling at airports and expand its operations to other carriers while performing the same jobs for Air India.

Similarly, Air India Engineering Services Ltd. (AIESL) will take undertake engineering maintenance, repair and overhauls activities for Air India and offer the same to other carriers.

The proposal was approved by the Cabinet Committee on Economic Affairs following which the Air India decided to hive off the two subsidiaries.

Accordingly, all employees working in the ground handling and maintenance, repair and overhaul facilities would be deputed to these two independent companies with service conditions, emoluments and perks remaining unchanged.

AIATSL was formed in 2003 and AIESL the following year.

The functions included passenger handling ramp, security and cargo handling for Air India.

Some of the foreign airlines it served at various Indian airports included Singapore Airlines, South African Airways, Emirates, Kuwait Airways and Ethiopian Airlines.

Under the new arrangement effective Friday, Air India will provide the initial capital expenditure to both subsidiaries to help them stabilize their operations.

The operationalisation of the two subsidiaries would also reduce the aircraft-employee ratio in Air India to global global standards.