Govt puts off Air India stake sale plan
19 June 2018
The government has decided to put off a planned sale of Air India and instead provide required funds to help the national carrier to improve its operational efficiency and become profitable, a senior official in the civil aviation ministry said today.
Air India stake sale failed to attract any bidders when the bidding process got completed on 31 May. Instead of pushing the sale plan further in an election year, the government has decided to provide required funds for its operations, the official said.
“The airline is posting operational profits. None of the flights go empty. With all the cost efficient mechanism in place, we will continue improving its operational efficiency. There is no need to rush in for disinvestment as of now,” the official said.
Air India will soon get funds from the government for its day-to-day operations and will even place orders for a couple of aircraft, the official added.
The decision comes less than three weeks after the proposed 76 per cent strategic stake sale in debt-laden national carrier, which has a consolidated debt of nearly Rs50,000 crore.
The decision was taken at a high-level meeting convened by finance minister Arun Jaitley on Monday. The meeting was attended by railway minister and acting finance minister Piyush Goyal, civil aviation minister Suresh Prabhu, transport minister Nitin Gadkari and other senior officials of finance and civil aviation ministries.
The government is now looking at turning around Air India to ensure that it makes profits on overall basis before going in for a listing. “Certain conditions have to be met before listing a company. Once Air India fulfils those, we will go in for an initial public offering and subsequent listing,” the official said.
According to Sebi (Securities and Exchange Board of India) norms, a company has to post profit in previous three financial years before it can list itself in the stock exchanges.
“The focus is on improving operational efficiency. We will continue to boost employee morale, starting from the top level, to better the functioning of the airline. Funds would be provided as and when required,” the official added.