The government is committed to provide appropriate liquidity and financial resources to Air India, Union Minister Jayant Sinha said today amid delay in payment of salaries at the airline and uncertainty over its divestment plans. In a major setback, the government’s proposed 76 per cent strategic stake sale in the debt-laden carrier failed to elicit any initial bids as the deadline ended on May 31.
“We are definitely going to provide necessary liquidity and financial resources so that Air India continues its very successful turnaround plan and provide world-class customer service to passengers. “… also to ensure that its talented and hardworking employees are paid on time for their services,” Sinha told reporters here this evening.
The national airline is facing financial woes and has delayed payment of salaries to employees for the month of May. The payment is likely to be made on June 15. Sinha, who was here to inaugurate an Air India-Boeing Accelerated AME Apprenticeship Programme, said the group of ministers would meet soon to take appropriate decision on the future of the flag carrier. “The government is committed to provide appropriate liquidity and ensuring all financial arrangements are in place for Air India to continue to maintain its operations at world class levels,” the Minister of State for Civil Aviation said.
According to the minister, Air India’s assets have been separated into two parts. “…. One which is put up for strategic disinvestment and other set of assets are in a asset holding… monetisation efforts for assets is underway in asset holding company,” he noted.
On Wednesday, a source in the government had said that it was considering listing of Air India after the proposal for 76 per cent strategic stake sale failed to attract any bidders. The government had proposed to offload 76 per cent equity in the national carrier as well as transfer the management control to private players, as per the preliminary information memorandum. The transaction would involve Air India, its low cost arm Air India Express and Air India SATS Airport Services. The latter is an equal joint venture between the national carrier and Singapore Airlines’ arm SATS.
Under the proposed disinvestment process, around Rs 33,000 crore debt would have remained with Air India. The national carrier’s debt burden was about Rs 50,000 crore at the end of March 2017. Air India is staying afloat on little over Rs 30,000 crore bailout package extended by the previous UPA regime in 2012.
Meanwhile, the Air India-Boeing programme for aircraft maintenance engineers (AMEs), inaugurated today, is funded by Boeing and would train 25 engineers annually. Sinha said the American aircraft maker would spend USD 50,000 on each of the 25 students annually in services and equipment. The smart classroom service would be run by Boeing and Air India Engineering Services Ltd (AIESL). It would have advanced training aids along with a specially customised curriculum to skill aircraft maintenance engineers. Classes for the first batch of the one-year programme would begin in August.