Civil Aviation

Government plans to go ahead with Air India sale ignoring parliamentary panel’s suggestions

The committee had suggested giving the debt-ridden national carrier five more years to revive itself.

The government on Monday said it will go ahead with its plan to sell stake in Air India, just days after a parliamentary panel suggested giving the debt-ridden national carrier five years to revive itself.

“We will seek expressions of interest certainly in February,” Civil Aviation Secretary Rajiv Nayan Choubey said, according to Mint. Choubey said authorities are drafting the invitation calling for bids and will submit it to the ministerial group given the task of overseeing Air India’s privatisation.

The government wants to wrap up the transaction by June, The Times of India reported. “Transaction advisers have been appointed,” the newspaper quoted an official as saying. “We will complete the process by June.”

On Sunday, the Parliamentary Standing Committee on Transport, Tourism and Culture suggested allowing Air India to function with less government control, as its debt woes were because of the Ministry of Civil Aviation’s “policy directions”. The panel also said the Centre should explore “an alternative to disinvestment of our national carrier which is our national pride”.

So far, IndiGo and Tata Sons Ltd have shown interest in taking over Air India’s operations. Turkey’s Celebi Aviation Holding, the Bird Group, Menzies Aviation Plc and Livewel Aviation Services Pvt Ltd have also shown interest in the national carrier’s subsidiaries.

On Monday, an aviation think tank also warned that Air India’s value would drop further if the divestment was delayed, PTI reported. “The parliamentary panel recommending that the divestment of Air India be postponed by five years will further erode its value,” Kapil Kaul, chief executive at the Centre for Asia Pacific Aviation, said.

Privatising Air India

The debt-laden carrier is surviving on taxpayers’ money, and the government has decided on a strategic divestment to cut these losses.

At the end of 2016-’17, Air India’s total debt was Rs 48,876 crore. The company has not made a profit in 10 years. In 2017-’18, it is expected to report a loss of Rs 3,579 crore.

In May 2017, the Niti Aayog had also recommended that the airline be strategically divested. Arvind Panagariya, the then vice chairperson of the think tank, had said Air India’s debt was “simply not sustainable”.

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