Air-India is to spin off its engineering and overhaul division into a 100 per cent separate subsidiary company like the ground support division.
The Air-India board, which met in Delhi on November 8, approved the memorandum and articles of association for setting up Air India Engineering Services Ltd with an authorised capital of Rs 10 crore (Rs 100 million), airline sources said on Monday.
Air-India: Of divestment and other issues
The decision to set up a separate engineering division is based on the recommendations of the A T Kearney report, which has suggested hiving off of all non-core activities into individual profit centres, the sources added.
The airline also held its annual general meeting on November 7 when it adopted the accounts and annual report, which will be placed before Parliament during the winter session.
The airline ended 2003-03 with a net profit of Rs 133 crore (Rs 1.33 billion). "No dividend was recommended in view of the accumulated losses," the sources said.