Union Minister of State for Civil Aviation Jayant Sinha on Wednesday said the government was committed to the strategic disinvestment of national carrier Air India, PTI reported. The minister said a team headed by Finance Minister Arun Jaitley was reviewing the airline’s financial and liquidity requirements.
The government failed to attract any bids for the sale of 76% of its stake in Air India before the May 31 deadline. “We are committed to supporting and strengthening Air India,” Sinha told reporters. “Whatever its financial and liquidity requirements, we will continue to support it like in the past. Alternate mechanism headed by Arun Jaitley is reviewing the situation and as required will take appropriate decision.”
Sinha’s comments come a day after it was reported that the government had deferred its plan to privatise Air India citing the aviation industry’s condition. Union Civil Aviation Minister Suresh Prabhu told Mint on Tuesday that the aviation sector was going through a tough time because of high crude oil prices. “So it is not the right time to sell stake in Air India,” he said. “We will review the proposal when the situation improves.”
In January, the government had announced its plan to divest 76% stake in Air India, ignoring a parliamentary panel’s recommendation to give the debt-ridden airline five years to revive itself. Air India has not earned profits since it was merged with the state-owned domestic operator Indian Airlines in 2007. The company earned an operating profit of Rs 298 crore in the last financial year through March 2017 but still posted a net loss of Rs 5,765.16 crore.
Earlier this month, the national carrier sought proposals for short-term loans worth Rs 1,000 crore to meet urgent working capital requirements. The airline has not paid salaries to nearly 11,000 employees for over three months. Sinha had then said that the Centre would provide funds to Air India to help pay staff salaries.