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  1. Focus now is to efficiently run Air India, says government

Focus now is to efficiently run Air India, says government

The government said on Wednesday while it is committed to the strategic divestment of Air India, market forces currently are not favourable for such a move, and a plan is being prepared to efficiently run the airline.

By: | New Delhi | Published: June 21, 2018 4:53 AM
Air India, Air India stake,  Jayant Sinha , modi government The government said on Wednesday while it is committed to the strategic divestment of Air India, market forces currently are not favourable for such a move, and a plan is being prepared to efficiently run the airline.

The government said on Wednesday while it is committed to the strategic divestment of Air India, market forces currently are not favourable for such a move, and a plan is being prepared to efficiently run the airline. The recent effort to sell the government’s 76% stake in the carrier did not elicit any response from private parties. “Just by that set of circumstances, it is clear that process is over and we have to move forward and consider other alternatives… As industry circumstances change, we will evaluate all those alternatives. If need be, we can restart that or any other process given the appropriate market conditions,” minister of state for civil aviation Jayant Sinha said.

He said high fuel prices and a weak rupee were among the causes for lack of interest by bidders in Air India. “The aviation sector is facing a lot of headwinds. Exchange rate is high, jet fuel prices have gone up, so have the interest rates. A decision has been taken that we revive the process when the conditions are favourable again. Till then, we will focus on keeping the airlines healthy. The government is committed to sell off the airlines at the right time,” Sinha said. The ministry has directed the Air India board to chalk out a fresh plan for efficient functioning after the failed divestment attempt. “Air India is making profits at operating level. The losses are due to legacy issues of the previous government. We do not want the airline to lose out on the market share.

The AI board will give us a report on the future plan of action in the next few weeks,” Sinha told reporters at an event marking four years of the NDA government. In May, Air India’s domestic market share stood at 12.8%, as per the aviation regulator. The airline’s operating profit more than doubled in FY17 to Rs 298 crore, while the net loss widened to Rs 5,765 crore in the same period. Meanwhile, the government has received bids for divestment in helicopter service provider Pawan Hans after a tepid response earlier this year. Under the disinvestment proposal, the government offered to offload its entire 51% stake in the company. The remaining share is held by state-owned ONGC.

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