Air India may let out office space at Mumbai HQ

Air India may let out office space at its Mumbai building on a nomination basis to organisations who have shown interest. The earlier plan was to award office space at the building through auctions.

State Bank of India, Service Tax Department, Hindustan Petroleum Corporation Ltd and Citibank have shown interest in shifting their offices to the Air India building in Nariman Point.

The proposal is likely to be discussed in the airline's board meeting to be held in Delhi on Friday.

"In the last board meeting, a member suggested that companies who have shown interest can be given the space on a nomination basis at a mutually agreeable rent. But the beneficiary will have to match the rates that emerge out of the bidding we carry for the rest of the space," said a senior civil aviation ministry official.

The official further said that the property price in the area, Nariman Point, is falling because people are moving to other areas.

"By giving it away on a mutually agreeable rent, we may not get the right value. But with a condition that the companies will have to match it to the higher bids, we will be safe. However, the rent will not be brought down from the mutually agreeable level, in case of a lower bid," the official said.

Air India building in Mumbai has 22 floors and the airline does not need more than three floors for itself.

Air India is also hiring a property consultant to generate revenues from properties in countries like Nairobi, which is not of much use now.

According to the financial restructuring plan, the airline has to raise around Rs 500 crore in the current financial year through sale and renting out of its property.

According to the plan, the airlines short-term debt to the tune of Rs 18,000 crore was also restructured by converting around 60 per cent to long term and the repayment of the rest through a bond issue, which is due for approvals from the finance ministry.

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