Air India

airline

India tower

Manmohan Singh

Mumbai

THE MAHARAJA’S TENANTS

At a time whenis struggling to pay salaries and has floated a tender for a Rs 1,000-crore short-term loan, the national carrier’s iconic 23-storey building on Marine Drive is doing its bit to keep theoperational.The airline offi- cials said the Air– India’s first structure with an escalator – is earning an annual rent of Rs 100 crore, most of which is spent on the staff’s salaries.Five years after Air India moved out of the Marine Drive building and shifted its headquarters to New Delhi, all floors of the building have been leased out barring a portion of the ground floor, which fell vacant in January this year, when the Bharatiya Mahila Bank moved out of the premises.Each of the Air India tower’s 23 floors are spread over a carpet area of 10,000 sq ft, and the lease rate in the area is around Rs 350 per sq ft, which means a single floor is earning the airline at least Rs 35 lakh. While the airline has retained a portion of the ground floor, the three floors above it (first, second, and third), and the top three floors, the sources said that airline could consider leasing out portions of some of these floors.“The Marine Drive building is Air India’s cash cow. It earns the airline Rs 100 crore. However, the total salary bill of its nearly 21,000 employees comes to around Rs 200 crore a month,” an airline source said.The government is banking on disinvestment to pull Air India out of the financial mess, but its proposed 76% strategic stake sale failed to elicit initial bids as the deadline ended on May 31. The airline’s debt burden stood at Rs 50,000 crore at the end of March 2017. It is still staying afloat on over Rs 30,000-crore bailout package extended by thegovernment in 2012.Acknowledging the Marine Drive tower’s contribution in keeping the national carrier afloat, Air India’s chief managing director, Pradeep Singh Kharola, said: “Nearly 17 floors are on rent. It contributes to some extent when the finances are bad.”The airline’s executive director (finance), Kirti Rao, added that in times of crisis, “every drop counts”. “The rentals from thebuilding help us generate revenue of Rs 100 crore per annum. Nearly 90% of the building is occupied and now we have a small portion to let out,” Rao said.When asked whether Air India will be able to retain the Marine Drive tower after disinvestment, a senior Air India official said nobody had any idea. “There will be an uproar if the building is sold,” the official said.Air India has retained the first, second, and third floors, and is looking for a tenant on the ground floor, after the Bharatiya Mahila Bank vacated the premises in January. The national carrier also retains the 21st, 22nd, and 23rd floors.According to the real estate brokers, the rent-als in the Air India building could be around Rs 350 to Rs 400 per sq ft, which means a 10,000 sq ft space will earn Air India around Rs 35 lakh a month.