Union Minister of State for Civil Aviation Jayant Sinha said the ministry was working on a comprehensive package to make Air India globally competitive again before the Centre divests its shares, Hindustan Times reported.
The government planned to divest 76% stake in Air India, ignoring a parliamentary panel’s recommendation to give the debt-ridden airline five years to revive itself. The proposed stake sale, however, failed to take off after the Centre did not receive any expressions of interest from potential bidders before the May 31 deadline.
“We will have to see how industry conditions develop before we take a decision on how to move forward on disinvestment,” Sinha said. “In the meanwhile our goal is to strengthen Air India as much as possible, to provide the financial resources and liquidity that it needs to operate properly.”
In 2012, the government promised to infuse Rs 50,000 crore in the airline till 2032. The company has received Rs 27,195 crore till date.
Sinha said the “government is committed” to ensuring that the national carrier receives necessary financial resources. “And has the liquidity to be able to operate as a really competitive global airline,” he added. “We are working on a comprehensive package to strengthen Air India.”
The package will include financial assistance, organisational improvement and care for employees. “We are working on it, as soon as it receives all the necessary approvals, we will share it,” the minister said.
Sinha said the overall tax burden of the aviation industry had increased after the Goods and Services Tax came into effect, and the ministry was working to build a supportive policy environment for the entire industry.
Earlier this month, Sinha said the government was committed to the disinvestment of Air India and had no plans to completely exit the national carrier.
In July, the Centre sought Parliament’s approval to sanction Rs 980-crore supplementary grant for investment in equity shares for Air India during the 2018-’19 financial year. Reports said the airline had requested additional equity from the government worth Rs 2,121 crore for the 2018-’19 financial year so that it can pay its vendors. The carrier owes about Rs 1,800 crore to its vendors.