1. Air India sell-off may not take off as minister Raju says not easy to find ‘bakras’ to buy it

Air India sell-off may not take off as minister Raju says not easy to find ‘bakras’ to buy it

Narendra Modi government’s plan to revive state-run carrier Air India by potentially selling the ailing airline to a private entity may have hit a serious snag today, with the civil aviation minister in his government himself proclaiming that it might be difficult to find any ‘bakras’ to buy the troubled behemoth.

By: | Updated: June 1, 2017 11:48 AM
air-india-sell-off, air-india-privatisation, air-india-disinvestment Air India, under intense competition from leaner, more efficient and often-cheaper private airlines, is reeling under a debt of about Rs 50,000 crore. (Image: Reuters)

Narendra Modi government’s ambitious plan to revive the state-run carrier Air India by looking at options including selling the ailing airline to a private entity may have hit a serious snag with the civil aviation minister in his government himself proclaiming that it might be difficult to find any ‘bakras’ to buy the troubled behemoth.

“There are hardly any bakras around,” Minister for Civil Aviation Ashok Gajapathi Raju said to CNBC TV18 in an interview aired on Wednesday, when asked if the government would be able to find a willing buyer without writing off a significant amount of debt. “To get one is difficult, and businessmen are businessmen,” he added.

Earlier this week, Finance Minister Arun Jaitley finally spoke openly about the intent to exit the ailing state-run carrier in order to lighten the government’s debt burden. “History has given us a second chance that a good investor should come, which has credibility so civil aviation ministry will consider it,” Arun Jaitley had said referring to Air India’s proposed disinvestment, adding, “If 86% of flying can be handled by private sector, so it can also handle 100%.”

Reality check

Air India, under intense competition from leaner, more efficient and often-cheaper private airlines, is reeling under a debt of about Rs 50,000 crore, with about Rs 28,000 crore in working capital debt, and about Rs 4,000 crore in interest burden alone. It has not turned profit in 10 years, since at least the year 2007.

However, today Raju posed the glaring reality check about low buyer interest, even as he laid out that the government is considering all options to bring back Air India into good financial health and taking the debt burden off the shoulders of the government. “Business as usual is not the option,” he said, adding that the earlier plans have not had a debt on the carrier’s finances. “I would not like to close any option,” Raju said.

Air India’s market share in domestic market has fallen to 14% in 10 years from 35% a decade ago, placing it third in the national ranking, behind Indigo, which commands about 40% of Indian skies, and Jet Airways, which has about 16% of the share. Air India also flies overseas, and commands 17% of the international traffic from and into India.

Air India has guzzled up taxpayer money over and over again but to no effect. The carrier has received bailout packages worth about Rs 24,000 crore out of a total Rs 30,000 crore approved, but has failed to revive its fortunes amid private airlines continuously gaining market share.

(This story was originally published on Wednesday, May 31 on www.financialexpress.com)

  1. H
    Hari
    May 31, 2017 at 11:25 pm
    THE PUBLIC SHOULD NOT BE EXPOSED FOR LOOTING BY PRIVATE OPERATORS IF AIR INDIA IS SOLD. UPA GOVT IS RESPONSIBLE FOR THIS HUGE LOSS WHICH MUST BE RECOVERED. THIS MUST BE TAKEN SERIOUSLY BY BJP GOVT WHO MUST RECOVER TOTAL LOSS OF AIR INDIA FROM CULPRITS. THE GOVT MUST FIRST ENSURE RECOVERY OF LOSSES CAUSED TO AIR INDIA BY NCP AND CONGRESS LEADERS. BJP GOVT MUST FIX RESPONSIBILITY FOR SUCH BIG SCAM WORTH MORE THAN ONE LAC CRORE BY NCP AND CONGRESS LEADERS IN PURCHASING OF HUNDREDS OF AIRCRAFT WHICH WAS NOT NEEDED BY AIR INDIA. THIS IS CASE OF RECKLESS LOOTING OF PUBLIC MONEY. THE PUBLIC IS FULLY AWARE WITH BUNG DONE BY UPA GOVT WITH CONNIVANCE OF NCP LEADERS. BJP GOVT MUST RECOVER LOSSES CAUSED TO AIRLINE FROM ETS OF NCP AND CONGRESS LEADERS BY SEIZING ALL THEIR ETS. THEREAFTER, THESE CULPRITS MUST BE TRIED IN FAST TRACK COURT TO CONVICT THEM WITHIN SIX MONTHS. ANY DILL DOLL TACTICS TO BAIL OUT CORRUPTS BY PRESENT GOVT WILL BE TAKEN SERIOUSLY BY PUBLIC.
    Reply
  2. H
    Hari
    May 31, 2017 at 9:32 pm
    THIS STEP WILL EXPOSE PASSENGERS AT MERCY OF PRIVATE AIRLINES WHO WILL RECKLESSLY LOOT PUBLIC AFTER SEL OF AIR INDIA. THE GOVT MUST LOOK INTO THE MATTER WHICH FORCED TO TAKE SUCH ANTI-PEOPLE STEP. IT IS MATTER OF GRAVE CONCERN THAT THE GOVT HAS NOT ARRESTED CULPRITS OF THIS GIGANTIC SCAM BEFORE SEL AIR INDIA. THIS IS NOT TREATED AS JOKE BY BJP GOVT WHO MUST RECOVER TOTAL LOSS FROM CULPRITS. BJP GOVT MUST FIX RESPONSIBILITY FOR SUCH BIG SCAM WORTH MORE THAN ONE LAC CRORE BY NCP AND CONGRESS LEADERS IN PURCHASING OF HUNDREDS OF AIRCRAFT NOT NEEDED BY AIR INDIA. THIS IS CASE OF RECKLESS LOOTING OF PUBLIC MONEY. THE PUBLIC IS FULLY AWARE WITH BUNG DONE BY UPA GOVT WITH CONNIVANCE OF NCP LEADERS. BJP GOVT MUST RECOVER LOSSES CAUSED TO AIRLINE FROM ETS OF NCP AND CONGRESS LEADERS BY SEIZING ALL THEIR ETS. THEREAFTER, THESE CULPRITS MUST BE TRIED IN FAST TRACK COURT TO CONVICT THEM WITHIN SIX MONTHS.
    Reply
  3. H
    Hari
    May 31, 2017 at 9:13 pm
    BJP GOVT MUST FIX RESPONSIBILITY FOR SUCH BIG SCAM WORTH MORE THAN ONE LAC CRORE BY NCP AND CONGRESS LEADERS IN PURCHASING OF HUNDREDS OF AIRCRAFT NOT NEEDED BY AIR INDIA. THIS IS CASE OF RECKLESS LOOTING OF PUBLIC MONEY. THE PUBLIC IS FULLY AWARE WITH BUNG DONE BY UPA GOVT WITH CONNIVANCE OF NCP LEADERS. BJP GOVT MUST RECOVER LOSSES CAUSED TO AIRLINE FROM ETS OF NCP AND CONGRESS LEADERS BY SEIZING ALL THEIR ETS. THEREAFTER, THESE CULPRITS MUST BE TRIED IN FAST TRACK COURT TO CONVICT THEM WITHIN SIX MONTHS. ANY DILL DOLL TACTICS TO BAIL OUT CORRUPTS BY PRESENT GOVT WILL BE TAKEN SERIOUSLY BY PUBLIC AND IT AMOUNTS TO CONNIVING WITH CONSPIRATORS OF THIS SCAM.
    Reply
  4. I
    Ind
    May 31, 2017 at 8:55 pm
    Air India must be merged with Indian Railways. National Award winner Sindhi Akshay Bhatia can airlift Air India and Indigo Airways.
    Reply
  5. A
    Arvind Chitale
    May 31, 2017 at 8:42 pm
    Very shabby comment by Mr. Raju the foolish minister. Who will buy then,?
    Reply
  6. S
    Sovon Sarkar
    May 31, 2017 at 8:06 pm
    There is a blog named as 'murdering the maharaja air india what really happened' posted back in 2011. If someone is really interested in knowing what and how it happened to Air India,search it on google, read it. Its not Air India who is sucking the taxpayers money, its the ministers and private airlines (including paid media) in the name of Air India. Nice planning (money from tax payers,private airlines, aircraft sellers...profit profit profit !!!) and good execution. Pity for those stupid hard working honest Air India employees as most of them must be innocent of all this.
    Reply
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