Cash-strapped state-run national carrier Air India will now leverage its properties and real estate in India and abroad to enhance revenue and infuse cash.
“Director Related Business (one of the directors in Air India) will be responsible for leveraging properties and real estate for enhanced revenues and cash infusion over the next 6-12-18 months, besides undertaking rent reduction measures,” an Air India circular stated.
Additionally, as a part of the restructuring exercise, Air India would also vacate some of its offices and staff from those offices and be relocated to other short-staffed stations.
The airline is expected to register a loss of about Rs 5,000 crore in 2008-09 due to high operating expenses. Its borrowings have risen from Rs 6,550 crore in November 2007 to Rs 15,241 crore in June 2009.
“The move would help the airline garner some working capital,” an industry analyst said. “Air India has some of the most prime real estate in India and abroad. To leverage these properties will help the airline mitigate some of its woes at least for the near term.”
According to the company estimates Air India has assets and properties valued at over Rs 10,000 crore, with the airlines’ office at Nariman Point alone being estimated at upwards of Rs 2,500 crore.