Debt-laden Air India will be split into four entities ahead of sale

India will break up its debt-burdened flag carrier into four separate companies and offer to sell at least 51 per cent in each of them as part of a disinvestment proposed by Prime Minister Narendra Modi.

The core airline business comprising Air India and Air India Express — the low-cost overseas arm — will be offered as one company, and the process will be completed by the end of 2018, Junior Aviation Minister Jayant Sinha said in an interview Monday. Its regional arm, ground handling, and engineering operations will also be sold separately in the same process.

A successful sale of Air India — with $7.9 billion in debt, five subsidiaries and a joint venture, and a combined workforce of 27,000 — is crucial for Modi, who wants to showcase his credentials as a reformist attempting to steer the state away from running businesses. The airline, which is surviving on a taxpayer-funded bailout, has strained government finances for decades, and Finance Minister Arun Jaitley said last year that money spent on Air India could have been used for education.

Air India