The government is ready to take bold decisions to make the sale of Air India attractive, Minister of State for Civil Aviation Hardeep Singh Puri said on Saturday.
Last month, the Group of Ministers (GoM), headed by Home Minister Amit Shah, met to work on the modalities of Air India’s privatisation and the government is expected to float a tender soon.
“We are going to make Air India attractive for disinvestment, we will learn the lessons from the previous attempt. This time we will succeed in selling Air India... We will show the boldness in decision-making required to sell the national carrier,” Mr. Puri told The Hindu .
The government has already decided to exit the airline completely and invite bids for a 100% stake sale — a lesson it learnt after it failed to sell the airline last year when it had put up 76% of its stakes in the airline for sale. Private players were hesitant to buy a company where it would have to deal with government interference.
The other stumbling blocks were the large size of Air India’s debt of over ₹50,000 crore and the severance package to be paid to the airline’s employees. Since then, the government has removed ₹29,000 crore of debt from the carrier’s balance sheets and transferred it to a separate entity or a special purpose vehicle (SPV).
On the issue of privatising airports owned by the Airports Authority of India, Mr. Puri said, “We are stepping on it very fast; I need resources to cross-subsidise (other airports).” The government is known to have chalked out a plan for privatisation of 25 airports.
The Ministry will also be renegotiating its bilateral seat agreements with various countries and has recently held meetings with delegations from the UAE and Saudi Arabia.
“These will be new generation agreements where we will put safeguards so that we are not at a disadvantage, where our carriers are able to use only 20% of the seats agreed upon, whereas their careers are able to utilise 80% of the seats. We need to ensure that the access is equitable and find out what bilateral advantage we can get.”
A bilateral air service agreement between the two countries fixes the number of seats that their airlines can fly per month into each other’s territories.
