As a part of its on-going privatization process, Air India will most likely transfer ownership of its four VIP Boeing 747-400s to Alliance Air.
Founded in 1996, Alliance Air operates as a regional airline within India and is a wholly-owned subsidiary of Air India, operating mostly domestic routes as part of the government’s Regional Connectivity Scheme.
Air India will continue to operate the 747s
According to what is being reported, unnamed sources told India’s primary business information source that even though the ownership will be transferred, Air India will continue to operate the planes.
The four jumbo jets being transferred over to Alliance Air are between 23.2 and 26.2 years old and are flown by Air India on routes between the Indian subcontinent and Saudi Arabia.
Despite not being equipped as proper VIP aircraft, they do offer 12 first class, 26 business class and a further 385 seats in economy, and are available for government use when needed.
The source claims that this is a temporary measure until Air India receives newer Boeing 777-300ERs. These are expected to be delivered before the end of 2020.
The Indian Government wants to sell Air India
This is just one of the measures the government is taking to clean up Air India assets ahead of a new attempt to find a buyer for the bloated state-owned airline.
In 2018 the government tried to find a private buyer for the struggling national flag carrier by offering a 76% stake in the airline.
While India might seem like a lucrative place to run an airline given the country’s population and economic growth, strings were attached to the sale that buys balked at.
A key sticking point was that the government wanted a new buyer to take on $5 billion of Air India’s massive $7 billion debt.
Another point of contention was the fact that the government still wanted a seat on the board to decide how the airline would be run, something no private investor would be happy with.
Thirdly, and just as important as the first two points regarding why the sale of Air India failed, was the government’s insistence that the airline could not be broken up or absorbed into another airline.
This time around 100% of Air India is for sale
Now, as the government readies for another attempt at finding a buyer, they will offer potential suitors 100% private ownership and a portion of the debt in line with Air India’s aircraft assets.
On a positive note, Air India has slimmed down its workforce to half of what it had in 2014 and owns lucrative airport slots at Delhi, Mumbai, London, Amsterdam, and Tokyo.
If the Indian Government fails to find a buyer the next time around, the airline will most likely fold and its assets sold off.
What do you think, will a sale be possible, or is the Indian Government just flogging a dead horse? Please let us know what you think in the comments section.