The Centre has started consultations on the future roadmap for Air India with all options, including disinvestment, being discussed to revive the ailing national carrier.
“We are holding meetings to discuss the future of Air India,” Civil Aviation Minister Ashok Gajapathi Raju said on Wednesday. When asked whether disinvestment of the national carrier was also being discussed, the Minister said, “What else would it be? We need to make Air India a sustainable airline and we are holding discussions. All suggestions are welcome.”
Equity infusion
The Centre was reconsidering its strategy on future equity infusions into the national carrier and a decision would be taken based on recommendations given by the NITI Aayog, a top Air India official said. The government think-tank has been tasked with formulating a roadmap for Air India’s future.
“Disinvestment talks are on. Government is rethinking why it should pump in a huge sum of money into Air India going ahead,” the Air India official said. As part of the turnaround plan, the Centre has already infused ₹24,745 crore as equity into Air India, till the end of 2016-17. The government has to infuse ₹30,231 crore up to 2021 as part of the turnaround plan approved by the previous United Progressive Alliance (UPA) government.
The NITI Aayog has been asked to submit its recommendations on Air India in the next few weeks, a senior civil aviation ministry official said. Chief Economic Adviser Arvind Subramanian had cited Air India’s example to highlight the government’s difficulty in privatising public sector enterprises in the Economic Survey 2017.
Back in 2000, the previous NDA government had decided to sell 51% of equity of erstwhile domestic airline Indian Airlines with 26% stake to a strategic partner. It also decided to allow disinvestment of 60% of Air India, which was running international operations, with 26% foreign entity stake. However, the move was dropped following opposition from the then Civil Aviation Minister Sharad Yadav.
Air India has been suffering continued losses over the years with 2015-16 witnessing a net loss of ₹3,837 crore. The loss narrowed from ₹5,860 crore in 2014-15 and ₹6,280 crore in 2013-14.
“The mountain of debt that we acquired appears insurmountable and is at the root of all the problems that manifest as symptoms to all and sundry,” Air India chairman and managing director Ashwani Lohani said in a Facebook post. Air India’s debt was ₹50,357 crore at the end of 2015-16.
