Lack of clarity on the company's future desists Air India's engineering subsidiary AIESL from formulating a long-term business plan despite having both infrastructure and expertise in executing big-time contracts, a source said.
The government plans to sell 100 per cent stake in Air India along with budget carrier Air India Express and its 50 per cent stake in ground handling arm AISATS.
However, there is no decision yet on other subsidiaries such as Alliance Air and Air India Engineering Services Ltd (AIESL).
Nevertheless, AIESL is expected to sign a contract with budget carrier SpiceJet for maintaining its entire Boeing fleet, the official said.
The company is also in discussions with Vistara for providing maintenance services for its Boeing 787 planes, which are expected to be inducted in the fleet from February next year, the official added.
"There is no certainty about the future of the company. We don't know whether the government is going to sell it or retain it. Due to this uncertainty, we are unable to chalk out a long-term business plan for the company," the source said.
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Set up in 2013 as a separate subsidiary, AIESL provides maintenance repair and overhaul (MRO) services, both line and major maintenance, for various type of aircraft in AI's fleet, third party airlines as well as to the defence forces.
It has six MRO facilities across Mumbai, Delhi, Nagpur, Hyderabad, Kolkata and Thiruvananthapuram, along with engines shops and landing gear maintenance facilities.
As much as 90 per cent of AIESL's revenue comes from the Air India group, which has a fleet of over 170 planes.
"The company has both expertise and capability besides having state-of-art MRO facilities pan-India to carry out big-ticket contracts. But we can venture out only when there is a clarity on the future of the company," the source said.
According to the source, AIESL already has a contract with SpiceJet for maintenance of its aircraft at Thiruvananthapuram, which is now being extended to pan-India. The company also provides MRO services to GoAir's A320 fleet.
He also said discussions with Vistara are in "advanced" stage for maintaining their B787 fleet and an agreement with the the airline is expected to be finalised "soon".
The Air India Specific Alternative Mechanism (AISAM) has approved re-initiation of process for the the government's 100 per cent stake sale in Air India along with Air India Express and the airline's stake in AISATS.
Air India's net loss in 2018-19 is provisionally estimated to be Rs 8,556.35 crore.
On November 27, Minister of State for Civil Aviation Hardeep Singh Puri told the Rajya Sabha that interests of Air India employees would be protected and there would be no job loss till its privatisation.
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