There have been a lot of talks lately about government’s disinvestment in Air India and if the latest rumours are to be believed, the government is keen to complete the sale of Air India within this year. The rumours also suggest that the government is looking to give preference to a domestic buyer in the process.
In June this year, the union cabinet had given an in-principle approval for the disinvestment in Air India. The committee constituted to look after the process is headed by Arun Jaitley. The same committee has now started to look at the possible options to execute the sale of state-owned airline.
ToI quoted a source within the government saying that the officials are keen to finalise the sale in the coming months. The official announcement of the completion of sale might take place as early as this year, however, no final decision has been taken yet about the buyer of the airline. A number of companies, including domestic and foreign have expressed interest in buying a stake in Air India, however, no discussion has reached to the final stage. Also, according to the source quoted above, the government is keen to sign a domestic company as the new owner of Air India.
Niti Aayog has suggested 100% disinvestment in Air India with writing off the debt, because analysts claim that no buyer will be ready to take the ownership of Air India with such big amount of debt. Air India currently holds a debt of over ₹50,000 crores. Out of this, ₹21000 crore is estimated to be related to air craft purchases and maintenance, along with ₹8000 worth of working capital.
For long, Air India has been operating under huge losses, resulting in piling of debt. The airline is currently operating thanks to a bailout package granted by the previous government. According to the bailout package, the Airline gets around ₹3000 crores yearly.