Govt to push ahead with Air India divestment
28 June 2019
The government is decided to go ahead with the divestment of its stake in the national carrier Air India, the civil aviation ministry stated in release on Thursday.
A meeting of the Cabinet Committee on Economic Affairs had, on 28 June 2017, in-principle approved the consideration for strategic disinvestment of Air India and its five subsidiaries. The CCEA had also constituted an Air India Specific Alternative Mechanism (AISAM) for this.
However, an AISAM meeting on 28 March 2018 decided to delay the process of Air India divestment due to issues like volatile crude oil prices and adverse fluctuations in exchange rates, an atmosphere not conducive for the disinvestment.
However, continued support from the govt had resulted in improvement of financial and operational performance of Air India. As per the recommendations of AISAM, the govt will now go ahead with the process of disinvestment of the company, the release added.
Air India’s provisional loss widened to Rs7,635 crore in the previous fiscal even as the government infused more money in the national carrier.
The government is now planning to liberalise the terms and conditions for the strategic sale. The changes would allow a potential buyer to go for a stake sale of the airline immediately after acquiring it. The revised norms would also enable merger or reverse merger of Air India with any existing business of the buyer.
At least 95 per cent stake of Air India will be up for sale while retaining 5 per cent for the employee stock option (ESOP).
But as things stand, there are no takers for Air India and bidders are more interested in international operations of Air India. And not on the national carrier's domestic operations.