A 44-year-old building owned by the cash-strapped Air India is keeping the airline afloat. The building which once housed its headquarters but now leased out to various firms generates an annual revenue of Rs 100 crore for the company.
The iconic 23-storey building now houses offices of Tata Consultancy Services and several government departments. Air India has kept a portion of the ground floor, the three floors above it (first, second, and third), and the top three floors, which the company is also thinking of leasing out soon, according to Mumbai Mirror.
Each floor on the building is spread over a carpet area of 10,000 sq ft, and the lease rate in the area is around Rs 350 per sq ft. That means a single floor is fetching the airline at least Rs 35 lakh. Overall it earns an estimated Rs 100 crore per year.
Just to give an idea, the amount is just half of the monthly salary paid out to its 21,000 workers.
“Nearly 17 floors are on rent. It contributes to some extent when the finances are bad,” Air India’s chief managing director, Pradeep Singh Kharola said.
Supplementing Kharola’s thoughts, airline’s executive director (finance), Kirti Rao said that in crisis “every drop counts”. “The rentals from the Mumbai building 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 added.
Earlier in the month, the airline asked for Rs 2,000 crore from the government to pay out delayed salaries to its staff. “We have requested the government to restore equity infusion in the airline, which was stopped because of the proposed disinvestment. We are seeking an additional Rs 2,000 crore funds to deal with the present situation,” an official said on condition of anonymity.
The government of India which owns the career had also proposed 76% divestment in the airline but found no takers. The airline has a debt of over Rs 55,000 crore.