FinMin asks AI for a firm plan on hiving off ground handling, MRO

New Delhi: Air India’s proposal to hive off its maintenance, repair & overhaul (MRO) and ground handling business into two separate units has drawn a sharp reaction from the finance ministry. The ministry has asked the national carrier to back the proposal with a detailed financial plan, said sources.
Air India, which has received a government bailout of Rs 3,200 crore in three financial years till date, had circulated a proposal for hiving off MRO and ground handling as separate business units (SBU) to various ministries before putting it up before the Cabinet committee on Economic Affairs (CCEA). These SBUs would enable the company to separate its core aviation activities from the rest and turn them into independent profit centres. “The finance ministry is not satisfied with Air India’s business proposal. We have asked the airline to rework its business plan,” said a civil aviation ministry official.
The finance ministry had asked the carrier to submit its growth and revenue projections for these units. The Planning Commission too has asked for additional data from Air India on its business plans and financial feasibility.
24/08/11 Smita Aggarwal/Indian Express

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Categories: Air India Aug 2011