The government had decided to retain 26% stake in the national carrier during the last attempt for sale, which, according to the transaction adviser, spooked the prospective buyers.
Civil aviation minister Hardeep Puri on Thursday said the government will completely exit Air India, and there is already significant interest among prospective buyers for it. “Air India should be totally privatised. We have to get the best possible deal and we have to get it in the shortest possible time available,” Puri told reporters.
The government had decided to retain 26% stake in the national carrier during the last attempt for sale, which, according to the transaction adviser, spooked the prospective buyers. No bidder had turned up to invest in the debt-laden carrier when the deadline for expression of interest expired on May 31, 2019.
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The group of ministers for Air India’s sale, headed by home minister Amit Shah, is expected to meet soon. Meanwhile, operating losses at Air India have narrowed to one-fourth at Rs 170 crore in the first four months of FY20. The airline’s operating loss was Rs 802 crore during April-July 2018.
The complete grounding of Jet Airways since April 17 has helped the domestic carriers including Air India to improve their passenger revenues and yields. The fares on major routes went up 25-30% year-on-year due to a huge drop in capacities.
While Air India’s passenger revenues have jumped 20% y-o-y, its operating expenses have shot up by 19.4% y-o-y in the four months of FY20. The airline received around 50 domestic slots from Jet’s quota and unutilised traffic rights to cities like Dubai, Hong Kong, Singapore, Doha and London.
“We have been able to improve our revenues despite no new planes being added to our fleet. Our flight occupancy was up 2% y-o-y in July and yield was also up 10% y-o-y last month. Our only problem is servicing high debt,” Air India chairman and managing director Ashwini Lohani said.
Air India’s 20 aircraft out of 128 planes are grounded for the last one year for lack of spares. The disinvestment-bound carrier did not receive any budgetary support from the government for 2019-20. Earlier this week, oil marketing companies had stopped fuel supplies to Air India at six airports over non-payment of dues. The airline reported a loss of Rs 7,635 crore in FY19 and had a total debt of Rs 58,351 crore at the end of March 2019.