Finance Minister Arun Jaitley and his Civil Aviation counterpart Ashok Gajapathi Raju today discussed the future course for debt-ridden Air India, with senior officials indicating that a decision on privatisation will be taken within three months.
Finance Minister Arun Jaitley and his Civil Aviation counterpart Ashok Gajapathi Raju today discussed the future course for debt-ridden Air India, with senior officials indicating that a decision on privatisation will be taken within three months. The meeting assumes significance with Jaitley pitching for disinvestment of Air India and government think tank NITI Aayog submitting its recommendations on making the carrier strong and viable.
“All options are being considered and the main objective is to make Air India a strong and viable entity,” Civil Aviation Secretary R N Choubey said after the meeting.The meeting between the ministers was attended by senior officials of both the ministries as well as Air India.
Staying afloat on little over Rs 30,000 crore bail-out package extended by the previous UPA regime, Air India is saddled with nearly Rs 50,000 crore debt and is in discussions with lenders on ways to restructure the loans. Earlier in the day, Jaitley said the civil aviation ministry has to explore various options for Air India on the basis of recommendations made by the NITI Aayog.
“We have received the recommendations from NITI Aayog and we are examining it. At this stage, we are considering all options and we cannot say as to what will be the final decision.”It will possibly take about three months to decide broadly how to proceed, which way to go, and so on,” Choubey told reporters. However, he did not disclose details about the NITI Aayog recommendations.
Since the merger of Indian Airlines with itself, Air India has been in the red. However, it posted an operational profit of Rs 105 crore on account of low fuel prices and increased passenger numbers in 2015-16. “NITI Aayog has given its suggestion to the Civil Aviation Ministry… Civil Aviation has to explore all the possibilities as to how the privatisation of Air India can be done,” Jaitley said earlier in the day.
A senior official said Air India has been bleeding due to huge debt overhang and if a solution can be reached on restructuring the debt that would be helpful.”Debt restructuring would be one important component of the process,” the official said, adding that Air India has been talking to banks for the last 4-5 months.
On Wednesday, a top government official said the Cabinet is expected to take a decision on whether to privatise Air India, whose financial situation is “very bad”.Last week, Jaitley pitched for Air India’s disinvestment saying the carrier’s market share is just around 14 per cent whereas the debt burden is Rs 50,000 crore. While discussions have gained momentum on the way forward for the ailing airline, the CBI has registered three FIRs and a preliminary enquiry (PE) to go into the controversial decisions made by the erstwhile UPA government with regard to Air India, including surrender of profitable routes to favour private carriers.