Air India Will Be Closed Down Or Sold 100% To Private Firms


On Saturday, Civil Aviation Minister Hardeep Singh Puri declared that Air India would be completely disinvested, adding that there is only one option: disinvestment or shutting down the airline.

This could have possibly encouraged interested buyers. For one, 100% of Air India is up for grabs, compared to just 76% earlier.

“We’ve decided that Air India will be 100% disinvested. The choice isn’t between disinvestment and non-disinvestment, it’s between disinvestment and closing down. Air India is a first-rate asset but has an accumulated debt of Rs 60,000 Crore. We need to draw the slate clean” Hardeep Singh Puri said.

Choice Isn’t Between Disinvestment And Non-disinvestment
Air India, despite being one of the world’s oldest airlines with vast route coverage, struggled miserably due to poor management, interference, a high jobs ratio, free subsidies to public employees, and a slew of other negative factors.

In the domestic market, the airline has a fair presence and network coverage, which will help potential acquirers in gaining a substantial size. The airline also carries a lot of debt, but the government is likely to shoulder the bulk of it.

The government is considering a new timetable for Air India’s disinvestment, according to the union minister, and financial bids will be solicited in the coming days.

“In the last meeting, on Monday, it was decided that the shortlisted bidders (for Air India disinvestment) be informed that the bids have to come in within 64 days…This time the Govt is determined and there is no hesitation,” he said. He added that the disinvestment process is likely to be completed by May or June.

Mismanagement Has Resulted In A Cumulative Debt
The government has started selling its entire 100% stake in Air India, which has been losing money since merging with Indian Airlines in 2007.

“…There is no choice, we either privatise or we close the airline. We run a loss of Rs 20 crore every day despite Air India making money now. Because the mismanagement has resulted in a cumulative debt of Rs 60,000 crore,” Puri had said on Friday.

“I don’t have the capacity to keep going to Nirmala Ji and say please give me some money,” he said in an apparent reference to seeking funds to run Air India from the finance minister. He also noted that earlier attempts at Air India privatisation were not successful because the attempts were half-hearted.