Govt set to make an equity infusion of Rs 300 crore in Alliance Air

The government is set to inject shares worth Rs 300 crore into regional airline Alliance Air, which is facing financial headwinds, according to a senior official.

Alliance Air, formerly part of Air India, is now owned by AI Assets Holding Ltd (AIAHL), a special purpose vehicle set up by the central government.

Divestment-restricted Alliance Air operates about 130 flights per day. In recent months, there have been instances of pilot strikes to protest the non-returning of salaries to the pre-Covid level and non-payment of allowances, among other things.

The Finance Ministry has approved a Rs 300 crore equity injection into Alliance Air, a senior civil aviation ministry official told PTI.

Specific details could not be confirmed immediately.

Flights branded ‘Alliance Air’ are operated by Airline Allied Services, which has changed its name to Alliance Air Aviation Ltd.

The authorized share capital of the company is Rs 2,000 crore and the paid up capital is Rs 402.25 crore, as per the latest data available with the Ministry of Corporate Affairs.

Alliance Air, which saw its net loss widen to Rs.447.76 crore in the 2021-22 financial year, has been grappling with financial troubles. The cash loss for the carrier widened to Rs. 224.18 crore in the financial year ending March 2022.

Four companies that were previously part of Air India are now under the AIAHL. These are Air India Air Transport Services Ltd, Air India Engineering Services Ltd, Airline Allied Services Ltd and Hotel Corporation of India Ltd.

All four companies are proposed to be liquidated by the government in due course.

Expressions of Interest (EoI) for Air India Air Transport Services and Air India Engineering Services are likely to be launched soon.

The Tata Group acquired loss-making Air India along with Air India Express in January 2022.

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