Ministry Seeks CCD Nod To Put A-I, IA Selloff Into Hanger

New Delhi, January 27: | Updated: Jan 28 2003, 05:30am hrs
The civil aviation ministry plans to seek endorsement of Cabinet committee on disinvestment (CCD) on its view that Air-India (A-I) and Indian Airlines (IA) should not be disinvested in the near future.

"The issue once sorted out at the Cabinet is expected to expedite the fleet acquisition proposals drawn up by the airlines," sources told FE.

The ministry is shortly moving a note to CCD so that a final decision is taken on disinvestment of the airlines. The long-pending decision to acquire fleet has been hanging fire for the last couple of years as it was linked to the airlines disinvestment. A view in the government at that time was that since the airlines were to be privatised, investment, purchase of aircraft and other such decisions should be taken by the strategic partner. This was also partly because the purchase order would run in crores of rupees.

Aircraft purchase was consequently put on hold, but disinvestment of the airlines also did not happen for a variety of reasons. Around the same time, the September 11 terrorist attacks in the US happened and the entire aviation industry plunged into the throes of recession. In fact, Union civil aviation minister Shahnawaz Hussain had earlier said that owing to global slowdown it was not the right time for the government to offload its equity in both the airlines.

He said that the global airlines will not show much interest in investing in the equity of Air-India as they were not in the best of financial health themselves.