State-run carrier Air India seems to be in recovery mode as the airline’s April to December 2019 EBITDA turned positive at Rs 460 crore and the losses also narrowed by 46%.
State-run carrier Air India seems to be in recovery mode as the airline’s April to December 2019 EBITDA turned positive at Rs 460 crore and the losses also narrowed by 46%. The national carrier also saw a rise in passenger revenue by 14.7% which now stands at Rs 17,320 crore during the same period, CNBC TV-18 reported citing unidentified sources. While the government is desperately trying to sell off the airline to a private player with Air India’s estimated losses at Rs 80,000 crore, the airline’s performance in the April-December quarter gives some hope for the airline’s recovery.
Meanwhile, the government is bent on selling its stake from the airline and recently, union minister Piyush Goyal said that the airline is a goldmine. “If I were not minister today, I would be bidding for Air India,” he said, CNBC TV-18 reported, adding that it is a well-managed and efficient airline. While the government now wants to give up its 100% stake from the airline, earlier in 2018 it had proposed to offload 76% stake. However, the same did not go well with the bidders.
Early this month, a group of ministers led by Union Home Minister Amit Shah approved the draft EoI and Share Purchase Agreement (SPA) for Air India’s disinvestment. He had also Air India’s privatisation was inevitable and also asked for cooperation of the employees for smoothly carrying out the divestment.
Meanwhile, India’s domestic air passenger growth swelled to double-digit for the first time since January 2019 in November 2019. “Indian airlines experienced a return to double-digit growth for the first time since January 2019, as traffic rose 11.3% compared to November 2018,” IATA said in a recent report. The domestic aviation industry had witnessed double whammy of Jet Airways shut down and Boeing 737 MAX groundings last year which resulted into severe flight in the market.