The Government is set to make an equity infusion of Rs 300 crore in regional carrier Alliance Air, which is facing financial headwinds, according to a senior official. Alliance Air, earlier part of Air India, is now owned by AI Assets Holding Ltd (AIAHL), a special-purpose vehicle formed by the central Government.

The disinvestment-bound Alliance Air operates around 130 flights daily. In recent months, there have been instances of strikes by pilots to protest against non-restoration of salaries to the pre-Covid level and non-payment of allowance, among other issues. The Finance Ministry has approved an equity infusion of Rs 300 crore into Alliance Air, the senior Civil Aviation Ministry official said. Specific details could not be immediately ascertained.  Flights under ‘Alliance Air’ brand are operated by Airline Allied Services, which changed its name to Alliance Air Aviation Ltd. The company’s authorised capital is Rs 2,000 crore and the paid-up capital is Rs 402.25 crore, as per the latest data available with the Corporate Affairs Ministry.

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

Four companies that were earlier part of Air India are now under 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 the four companies are proposed to be divested by the Government in due course.

The Expression of Interest (EoI) for Air India Air Transport Services and Air India Engineering Services are likely to be floated soon. Loss-making Air India along with Air India Express was taken over by Tata Group in January 2022.