Air India divestment will happen but suggestions are welcome: Aviation minister Ashok Gajapathi Raju

Last week on January 10, the government tweaked foreign investment rules and allowed foreign airlines to own as much as 49 percent of Air India.

(File Photo | Reuters)

NEW DELHI: The proposed divestment of national carrier Air India is going to take place. However, suggestions on the strategic divestment are welcome, civil aviation minister Ashok Gajapathi Raju has said. The minister made the statement while responding to recent reports that a Parliamentary Panel might recommend to scuttle the divestment process.

“Members of Parliament are free to suggest. Whatever suggestion they give us, we will look at them. Recommendations and discussions on the issue are always welcome. However, I don’t think that anything will be called back. That’s not the way how government can work,” Raju said.

An inter ministerial committee headed by finance minister Arun Jaitley is finalising the modalities of the divestment—of at least 51 per cent stake—in Air India and its subsidiaries. “The (process) is going on, guided by the Alternative Mechanism, but I will not fix any timelines to it, especially for the decisions made on such levels, Raju said.

Air India has been unprofitable since its 2007 merger with state-owned domestic operator Indian Airlines Ltd. At the end of March 2017, the total debt of Air India was Rs 48,877 crore. Of the total debt, Rs 17,360 crore were aircraft loans and Rs 31,517 crore were working capital loans. The national carrier got a new lease of life in April 2012, when the then UPA government approved a Rs 30,000-crore turnaround and financial restructuring package spanning up to 2021.

Raju reiterated that the government will safeguard the interest of Air India employees. Along with its subsidiaries, Air India has nearly 29,000 employees and the government has already stated that it is exploring options of absorbing Air India employees in public sector enterprises and voluntary retirement package.

Last week on January 10, the government tweaked foreign investment rules and allowed foreign airlines to own as much as 49 percent of Air India.

Erstwhile rules barred foreign airlines from owning any share in Air India, even though they were allowed to have up to 49 percent stake in other Indian airline companies. So far, Interglobe Aviation, which runs IndiGo Airlines, is the only airline company to have officially expressed intent to buy the national carrier. Aviation industry majors SATS, Bird Group and Celebi have shown interest in buying Air India’s ground handling unit. Earlier, this week, the government said it will split Air India into four separate companies and then offer it for sale.