August 31, 2017 TnH Global

Bird Group wants to fly off with Air India’s ground-handling arm

Travel services firm Bird Group has expressed interest in acquiring Air India’s profit making ground-handling subsidiary, becoming the second suitor for the whole or part of the national carrier that the government is looking to privatise.

Aviation secretary RN Choubey, speaking on the sidelines of an Assocham conference, said the government has received formal interest from the Bird Group. While no-frills airline IndiGo has said it was looking to acquire the state-run airline, the Bird Group’s interest is limited to the ground-handling business under Air India Air Transport Services Ltd (AIATSL).

Sources in New Delhi-based Bird Group, which already provides ground-handling services at seven airports including Delhi, Mumbai, Bengaluru and Kochi, confirmed the move. “We have also requested the government to sell Air India and its subsidiaries separately, as it would fetch them maximum value for the airline,” a top company executive said.

“We operate a ground-handling company in a market where AIATSL is the biggest player, and a bid, if the government decides to sell it separately, will be put by the Bird Group,” this executive added, speaking on the condition of anonymity.

The group had written a letter, expressing its interest, to the aviation ministry in July. If it acquires AIATSL, the executive said, the Bird Group will keep it as a separate company, at least initially, and not merge with its own ground-handling company. The 45-year-old group also operates in travel technology, hospitality, retail and education sectors.

AIATSL shares its revenue with parent Air India. At 25%, its market share is the highest among the ground-handling companies in the country. About 85% of the domestic and international ground-handling business in India is serviced by airline themselves and the rest is services through ground-handling companies. Analysts said breaking up the loss-making airline into core and non-core businesses and selling them separately will fetch more value for the government.

“The non-core businesses like ground handling and MRO should be divested from Air India’s core business to get the maximum value. However, breaking international and domestic businesses into two before selling would be a bad idea,” said a Delhi-based aviation analyst, who did not wish to be named.

News Source: economictimes.indiatimes.com