After a failed attempt at selling Air India, the government has now asked the national carrier’s board to prepare a revival plan for the ailing airline.
“Since there was no interest for the airline, we have decided that the government has to ensure the airline has to run properly. For that, the carrier’s board is coming up with a plan,” civil aviation minister Suresh Prabhu told reporters today.
He added that the decision was taken two days ago by the Empowered Group of Ministers headed by finance minister Arun Jaitley, who is also the minister of divestment.
“Air India is the national carrier and has significant role in the growth of aviation industry in the country. However, Air India suffers from legacy issues, of which the huge debts is one of them, which has adversely impacted the bottom line of the airline,” Prabhu said.
He emphasised that there has been a turnaround in the operating profits of the airline. According to a report released by the ministry of civil aviation, the carrier’s revenues grew from Rs 16,000 crore in FY13 to Rs 23,000 crore in FY18.
About the lack of bidders for the carrier, Prabhu said the aviation sector globally has been facing challenges, including India, because of high fuel prices and uncertainty due to exchange rates, among others, which affected the divestment processes as well. “The government had called for strategic divestment of the airline and had invited bids but none came,” he said.
Jayant Sinha, minister of state for civil aviation, clarified that while the government has deferred the plan to sell Air India, it is still interested in strategic divestment of the airline.
The government had announced the divestment of Air India early last year, following which it released the Preliminary Information Memorandum in March 2018. While there were rumours of several airlines expressing interest, none formally sent an expression of interest, which ended on May 31. The government then announced that it has deferred the stake sale.