In the biggest news concerning Air India, the government has given in-principle approval for the disinvestment in state-run Air India. The cabinet has approved the recommendations of the committee which was formed to suggest options about Air India, the committee is headed by union finance minister Arun Jaitley.
Speaking to the reporters after the cabinet meeting, Arun Jaitley said that the cabinet has approved the proposal by aviation ministry which had suggested disinvestment in Air India. The cabinet also approved the recommendations of a committee which was formed to suggest developments in the same case. The committee will now decide the terms of disinvestment, including the percent of stake government will be selling in order to recover its losses from the national carrier.
The committee will also decide on the fate of three profit-making subsidiaries of Air India. These 3 subsidiaries include Air India Express, AI transport services and AI-SATS. Air India Express is a low-cost international flyer service provider, whereas AI Transport services is a ground handling unit. AI-SATS is a joint venture with Singapore Airlines Terminal Services, where both the companies hold 50% ownership.
Department of Investment and Public Asset Management (DIPAM) has prepared a 30 page letter, which includes recommendations from aviation ministry as well as Niti Aayog. The recommendations from Niti Aayog include a 100% disinvestment in Air India, whereas, Aviation Ministry has suggested selling off its assets and subsidiaries, which can help in recovering over ₹33000 crores. Air India currently holds debt of over ₹55000 with losses worth over ₹50,000 crores. The airline is currently running on a bailout package, which was approved by the previous UPA government.