New Delhi: The “for sale” tag on iconic Air India Tower in Mumbai is being replaced by “to let” placard for now as the cash starved national carrier is planning to rent out three floors which house a part of its commercial operations.
The debt-ridden airline has decided to keep only a small portion in the building for booking and other activities and lease the remaining space, two senior officials said.
“This is the plan right now. We want to keep a very small space in the Nariman Point building and lease out the rest,” said one of the officials.
He said sale of the building is unlikely to happen anytime soon as it will currently not fetch a very good price. Further, some employees have already protested against alienating the property from Air India.
Following the proposal to sell the 23-storey airline building to Jawaharlal Nehru Port Trust (JNPT), the government had in August appointed consultancy firm Cushman & Wakefield to ascertain the value of the signature tower.
The government had mooted the plan to sell the Nariman Point building after the bid to divest majority 74 per cent stake in the airline failed miserably with not a single private party showing interest in the expression of interest (EoI). The move is aimed at raising much-needed funds for the sinking carrier.
Airline insiders, however, doubt that government would succeed in its plan to transfer the property to JNPT in the wake of impending elections in states and subsequent general elections. There are also issues related to the valuation of the building. While Air India has ambitious projections about the commercial real estate market in the coastal city, the state-owned port operator is conservative. “There is wide variance in what Air India has estimated and JNPT,” the official quoted above said.
The national carrier earned Rs 291 crore as lease rental from its signature building between 2012-13 and January 2018. In all, it monetised a sum of Rs 543.03 crore from all its fixed assets during this period. Saddled with a debt of Rs 50,000 crore, state-run Air India has been surviving on taxpayer money since 2012.
