Thu. Mar 28th, 2024
Air India

The union cabinet might take the final decision about privatisation of Air India, the state-owned airline, this week. Currently, the government owns a majority stake in the national carrier and it has a couple of options in front of it to choose. One of them includes partial stake sale to the private players whereas, the other one includes complete privatisation.

According to a senior official from aviation ministry, the committee comprising of secretaries has compiled a report, which includes recommendations from both, Niti Aayog and aviation ministry. The committee has presented its report to the union cabinet and a decision on that is likely soon. The report by committee suggests reduction of Air India’s debt by a significant margin by selling its subsidiaries and assets, before eventually selling the stake as the final step.

According to the official quoted above, the final decision rests with the union cabinet. It was to discuss the recommendations last week, however, due to some circumstances, it could not be taken up by them. Hopefully, it will be discussed in the ongoing week.

Over 2 months ago, Prime Minister Narendra Modi gave a green signal to explore options in order to reduce the loss in Air India. One of the recommendations included privatisation of the airline and that has sounded the most significant till now. Air India has a combined debt of over ₹55,000 crore and it has made losses worth ₹50,000 in the last few years.

One of the proposals by Aviation Ministry suggested selling of subsidiaries and assets of Air India, which can amount to ₹30,000 crores. Currently, the company pays over ₹4500 crores of interest on the debt. It has been running majorly because of a ₹30,000 crore bailout package, which was approved by the previous UPA government in 2012.

By Prithviraj Singh Chauhan

Part time journalist, full-time observer. Editor-in-Chief at The Indian Wire. I cover updates related to business and startups.