Civil aviation ministry to sell Air India assets worth Rs 250-crore in Mumbai, Chennai and Coimbatore

NEW DELHI: The civil aviation ministry has prepared a Cabinet note proposing sale of properties worth Rs 250 crore belonging to state-run Air India, a move that has come after a delay of two years and is part of an asset monetisation plan to raise Rs 5,000 crore over a period of three years till March 2016.

The ministry will soon send the note to the Cabinet on sale of land and houses in Mumbai, Chennai and Coimbatore, a senior ministry official said. The plan originally envisaged monetisation of assets worthRs 1,200 crore in 2013-14, Rs 2,000 crore in 2014-15 and Rs 1,800 crore in 2015-16. The money was to be used to retire the airline’s debt.

However, adverse market conditions and legal issues over title deeds and ownership clauses forced the airline to sign a memorandum of understanding with National Buildings Construction Corporation (NBCC) in December last year.

NBCC will develop and redevelop properties on land owned by Air India on a project-toproject basis. The delay in asset monetisation has adversely impacted the airline’s plan to clear debt of Rs 40,000 crore. Its annual interest outgo stands at about Rs 3,800 crore.

Air India had cumulative losses ofRs 36,000 crore on its books in the previous fiscal. Its losses widened to Rs 5,388 crore in 2013-14, against the target ofRs 3,989 crore, primarily due to high operational costs.