The government should put on hold its plan to divest stake in Air India and give the debt-ridden airline at least five years to revive, a parliamentary panel has said in a draft report. It has suggested allowing Air India to function with less government control, as its debt woes are because of the “policy directions” by the Ministry of Civil Aviation, PTI reported on Sunday.
The Parliamentary Standing Committee on Transport, Tourism and Culture said the Centre should explore the possibility of “an alternative to disinvestment of our national carrier which is our national pride”. It would be “lopsided” to evaluate Air India solely from a business viewpoint, as the Niti Aayog had done, the panel said.
In May, the Niti Aayog had recommended that the airline be strategically divested. Arvind Panagariya, the then vice chairperson of the think tank, had said the airline’s debt was “simply not sustainable”.
The panel’s report observed that Air India was under a 10-year financial restructuring plan since 2012 and had shown improvement in various ways in the period. So a review of its financial status may take place at the end of the period, in 2022, the panel is likely to say in its final report.
The strategic divestment of stake in Air India would also lead to job losses, the panel said in its revised draft report.
The debt-laden carrier is surviving on taxpayers’ money, and the government has decided on a strategic divestment to cut these losses. By the end of 2016-’17, Air India’s total debt was Rs 48,876 crore. The company has not returned a profit in 10 years. In 2017-’18, it is expected to report a loss of Rs 3,579 crore.