The disinvestment plan is mainly aimed to revive the airline's fortunes. The other three units are regional carrier Alliance Air, MRO operator Air India Engineering Services and ground handler Air India Air Transport Services. Earlier, the government had said splitting Air India into parts could decrease its total valuation, though it's not clear what prompted it to take the current decision.
While foreign airlines were allowed to invest up to 49 per cent in the paid-up capital of Indian private airlines under the government approval route, this provision was not applicable to Air India.
Sources in the know said the government is mulling providing airline employees the option of joining public sector companies.
Ahead of the proposed strategic stake sale, group ministries are mulling over the modal quality during the bidding. Jayant Sinha, Junior Aviation Minister speaking in an interview confirmed that the stake sale of Air India will be split into four separate firms and will be completed by end of 2018.
Along with its subsidiaries, AI has almost 29,000 employees and the government is exploring options to absorb them in public sector enterprises or offer voluntary retirement package.More news: Honoring Martin Luther King Jr
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Sinha added that Air India and Air India Express, a subsidiary of the national carrier, will be sold as one company. "As a matter of fact, Air India has expanded its worldwide routes and Overseas Indians have greatly appreciated the expansion", Raja said.
Meanwhile, a parliamentary panel is likely to suggest that Air India should be given at least five years for revival.
Under a turnaround plan approved by the previous regime, Air India is to receive up to Rs 30,231 crore from the government subject to meeting certain performance thresholds. It has allowed foreign airlines to own up to 49% of the national carrier.
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