Air India Begins Auctioning Property To Raise Funds

Air India will begin auctioning dozens of its properties across India to raise funds and pay off its debt. The carrier hopes to raise ₹270 crores ($36.1mn) from the sale process, which will go towards boosting its balance sheet before the divestment. Let’s find out more.

Air India Boeing 777-300ER
Air India owns property ranging from apartments to commercial spaces to plots of land across India. Photo: Vincenzo Pace | Simple Flying

Up for grabs

Bidding for dozens of Air India properties across India will go live at 14:00 local time later today, 8th July, and ends tomorrow. According to Moneycontrol, the flag carrier is hoping to raise at least ₹270 crores ($36.1 million) from the auction process as it looks to monetize its assets. 28 properties will be up for grabs today, giving up an insight into Air India’s non-airline holdings.

Notable properties at the auction include five apartments in the Asian Games Village in south Delhi, 14 flats over a sprawling 2,003 sqm plot in Pali Hill, Bandra, and several others. It’s not only residential space being sold, Air India is also selling its booking office in Aurangabad along with staff quarters and more.

Air India Headquarters Mumbai
Once an asset, Air India’s vast property portfolio across India has quickly become a liability for the airline. Photo: Getty Images

Bidding prices for the various properties start at ₹13.3 lakhs ($17,800) to ₹150 crores ($20 million). In order to boost participation, the airline has also dropped the price of some properties in big cities by up to 10% as a result of the pandemic.

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Not the first

Property sales are not new for Air India. In 2019, the carrier held two sales, including 60 and 56 surplus properties each. All of these were made in order to boost the airline’s cash reserves and reduce its billions of dollars of debt. However, many of these properties available in today’s auction went unsold in 2019 too.

This includes the 14 flats in Bandra, Mumbai, and properties in Kolkata, Bangalore, and other places. However, with lower prices and a very different market today, Air India is hoping to meet and exceed its goal for this asset sale.

Air India Boeing 787
As the government prepared to offload Air India to private buyers, monetizing assets is a part of the process. Photo: Getty Images

This time around, there has been a strong interest in the properties up for grabs. Dozens of people have visited the apartments in Delhi and Air India has fielded over 500 calls for inquiries on various properties. Another positive factor is that since the purchase process is directly with the government, there is little doubt over the final price and paperwork after the sale.

The next 24 hours will tell us how successful Air India is in selling 28 of its valuable assets across the country. If all goes well, it could be one step closer to its asset monetization goals before privatization.

Sale coming soon

As Air India gears up to go to private hands, the two bidders for the airline are currently reviewing the carrier’s internal data. While SpiceJet CEO Ajay Singh was initially denied access to the data due to his executive role, it’s unclear if he now has access. Regardless, the government is hoping the final sale of Air India is complete by the end of 2021, with the Tata Group looking to be the leader currently.

What do you think about Air India’s property sale? Should carriers purchase and hold scores of properties? Let us know in the comments!