The Centre has decided to divest its entire stake in Air India Ltd and its no-frill subsidiary Air India Express, a year after it failed to attract bids for a partial stake sale in the cash-strapped national carrier.
“Air India Specific Alternative Mechanism (AISAM) has approved the 100 percent sale of Government of India’s stake in Air India, along with Air India Express, and government’s stake in AISATS for the re-initiated strategic divestment of Air India,” civil aviation minister Hardeep Singh Puri informed the Rajya Sabha on Wednesday.
The government owns 100% stake in Air India, and its subsidiary Air India Express. AISATS is a joint venture partnership between Air India and Singapore Airport Terminal Services (SATS) Limited, which provides ground and cargo handling services.
Puri said the government’s failure to find bidders for the national carrier in its previous attempts at divestment was partially due to its decision to retain a 24% stake in the airline.
Air India’s operating expenses rose about 24% year-on-year to ₹30,194.06 crore during fiscal 2019, Puri said, adding that there are no plans to provide another rescue package to the national carrier.
The airline has been surviving on a rescue package, which was approved as a part of its Turn Around Plan (TAP) in 2012. Under the plan, the government has infused over ₹29,000 crore into Air India since then.
The company’s net debt swelled to ₹58,351.93 crore at the end of March 2019 from ₹55,000 crore at the end of March 2018, which includes working capital and aircraft-related debt.
Selling Air India, which has about 128 planes, will help the government exit a loss-making business.
On Wednesday, Puri told news agency Asian News International (ANI) that it may be difficult for the government to run the national airline without selling it. “If it (Air India) is not privatized then from where the money would come to for it to function.”
Source: Mint