A proposal for hiving off Air India Engineering Services and Air India Transport Services into wholly-owned subsidiaries of the airline is likely to be considered by the Union Cabinet at its meeting scheduled for Thursday.
The board of directors of Air India Ltd, the parent company, at its meeting held in August 2010, approved operationalisation of Air India Engineering Services Ltd and submitted a note to the Ministry of Civil Aviation for getting the Cabinet nod. The board’s note is now expected to be taken up by the Cabinet.
“Once the approval of the Cabinet is received, the assets and manpower from Air India Ltd will be transferred to Air India Engineering Services Ltd as initial capital infusion by Air India Ltd and the company will be treated as a separate profit centre for carrying out the Maintenance, Repair and Overhaul activities of Airbus and Boeing fleet,” sources said.
The Government decided to operationalise Air India Transport Services Ltd as a new subsidiary of Air India to hive off ground handling business of Air India in order to develop it as a separate profit centre.
This would be ensured by inculcating improved quality services benchmarked to global standards, new work culture with customer focus, quick response to customer requirements, reduction in overhead costs, improved productivity on a low-cost platform, accountability for growth and profits, officials said.