Government to Infuse ₹300 Crore Equity in Struggling Regional Airline Alliance Air

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In an effort to alleviate the financial challenges faced by government-backed airline Alliance Air, the Ministry of Finance has announced a planned equity infusion of ₹300 crore. Alliance Air, a regional carrier that operates 130 flights daily, has been grappling with mounting losses, strikes by pilots, and payment issues. The airline, currently owned by AI Assets Holding Ltd (AIAHL), was previously a part of Air India and is slated for disinvestment. The Ministry of Civil Aviation official, speaking to news agency PTI on the condition of anonymity, revealed the government’s intention to provide financial support to Alliance Air.

The airline reported a net loss of ₹447.76 crore in the fiscal year 2021-22. The infusion of funds aims to address the company’s financial woes and ensure its continued operations. Alliance Air flights are managed by Airline Allied Services, which recently rebranded as Alliance Air Aviation Ltd. The company’s authorized capital stands at ₹2,000 crore, with a paid-up capital of ₹402.25 crore, according to the corporate affairs ministry’s latest data. AIAHL, the current owner of Alliance Air, also holds three other companies formerly associated with Air India, namely Air India Air Transport Services Ltd, Air India Engineering Services Ltd, and Hotel Corporation of India Ltd. The government plans to sell off these entities in the future.

The Expression of Interest (EoI) for Air India Air Transport Services and Air India Engineering Services is expected to be announced soon. Following its acquisition of Air India and Air India Express, the Tata Group took over their operations in January 2022. However, Alliance Air remained under government ownership, and its financial struggles prompted the Ministry of Finance to intervene and provide much-needed equity infusion to stabilize the airline’s operations. The proposed infusion of ₹300 crore into Alliance Air signifies the government’s commitment to support regional air connectivity and ensure the viability of the airline amid challenging times.

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