Air India eyes sale of scrapped engine parts to generate revenue
The carrier plans to salvage select engine parts under a profit sharing arrangement, failing which they would be sold as scrap, as per a tender document.business Updated: Oct 23, 2017 22:38 IST
Air India has sought business proposals for sale of scrapped aircraft engine parts, a move that could provide additional revenues for the disinvestment- bound national airline.
The carrier plans to salvage select engine parts under a profit sharing arrangement, failing which they would be sold as scrap, as per a tender document.
The proposal comes at a time when the government is working on the modalities for disinvestment as part of efforts to revive the debt-laden flagship carrier.
According to the document, the airline is seeking business models on a profit-sharing arrangement for possible salvaging of selected engine parts and generate revenue through sale and marketing of such salvaged parts.
“In the event there is no possibility of salvage, bidder will have to make arrangements to destroy/dispose of the same as metal scrap and offer maximum revenue value for such disposal sale at agreed rates and no cost to Air India Ltd,” it said.
Further, successful bidders would have to collect the material from respective sites as well as arrange for cross country transportation, export clearance and repair, among other requirements.
Last month, Air India CMD Rajiv Bansal said the airline plans to vacate unused hangar space at some airports and sell the scrap lying there to cut costs.
“I am finding that there is a lot of unused material lying in hangars and unnecessarily we are holding on. So we can get some money by selling the scrap and also save rentals by leaving the space,” he had said.
Air India group has an operating fleet of over 140 aircraft. It operates to 42 international destinations and over 70 domestic stations.
The flagship carrier has a debt burden of more than Rs 50,000 crore and is surviving on a little over Rs 30,000 crore bailout package extended by the previous UPA regime.
The government has decided to go for strategic disinvestment of Air India and its five subsidiaries.