Air India plans to lease out 17,000 sq ft of commercial space at its erstwhile headquarters in Mumbai, which could fetch the state-owned carrier an additional Rs. 5 crore revenues annually.
The state-owned airline, which is surviving on government funds as part of a long-term turnaround plan, already rakes in more than Rs. 80 crore annually from leasing out of floors in that building.
As many as 16 floors of this 23-storey iconic building located in South Mumbai and opened in 1974 have been leased out.
The airline has already rented out most of the 4,49,000 sq ft space of the iconic Air India Tower facing the Arabian Sea in the country’s financial capital.
Air India is hoping to mop up an additional amount of up to Rs. 5 crore annually by way of leasing out an additional 17,297 sq ft of space, a senior airline official said.
“We are expecting a premium considering the location of the property. We are hopeful of leasing out the proposed space for an up to Rs. 300 sq ft per month,” the official said.
The airline plans to lease out the additional space for a period of up to nine years, the official noted. They would be at the ground and first floors as well as part of the eighth floor.
Some commercial space at the building have already been leased out to State Bank of India, Mahila Bank, Income Tax and Service Tax Departments.
With regard to leasing out more space at Air India Tower building, the airline recently invited bids from government institutions and reputed private companies.
The carrier is looking to lease out the vacant premises in the building to large corporates, government organisations and international banks, among others.
As part of the airline’s asset monetisation plan, the government last month approved an Air India proposal to sell its plot of land in Coimbatore in Tamil Nadu to National Building Construction Corporation (NBCC) Ltd for Rs. 19.81 crore.
The asset monetisation plan, approved along with its turnaround plan by the Cabinet Committee of Economic Affairs in April 2012, took off after a delay of nearly three years in 2015.
In November 2015 also, the loss-making carrier was allowed to sell four residential flats in Mumbai to public sector lender SBI for about Rs. 90 crore.
Under the asset monetisation plan, Air India has to mop up Rs. 5,000 crore over 10 years, starting from fiscal 2013-14, in its bid to bridge the widening mismatch in its revenue and expenditure.
The assets being considered under the plan are spread across Mumbai, Delhi and Chennai, among other places.
Grappling with a heavy debt burden, the airline has been exploring various options to raise money to meet its funding requirements.
Air India is surviving on a Rs. 30,231 crore bailout package extended by the previous UPA government in 2012. Under the Turnaround Plan (TAP), which runs till March 2021, it has already received Rs. 22,280 crore.