Hurdles remain for loss-making maharaja

The stage is all set for the Centre to sell Air India, but it’s bereft of one key detail—buyers.

Published: 15th May 2018 04:00 AM  |   Last Updated: 15th May 2018 03:21 AM   |  A+A-

The stage is all set for the Centre to sell Air India, but it’s bereft of one key detail—buyers. The government wants to privatise the national carrier both to get brownie points ahead of general elections and to bolster the country’s fiscal buffers. The government’s initial desperateness attracted potential suitors queuing up for the good parts hoping Air India will end up as a garage sale or at least its assets would be sold in bits and bobs to maximise returns. Alas, that wasn’t the case as the national carrier will be sold only as a sum of parts, puncturing the hopes of IndiGo, Emirates, Qatar, and Tatas, who have reportedly backed off.

The loss-making Maharaja is crumbling under a Rs 50,000-crore debt pile, and is surviving on a Rs 30,000-crore life support from taxpayers. Though net losses are widening, its operating profit too is improving, which is why the 10,000-odd workforce is opposing the move saying the stake sale is akin to socialising losses and privatising profits. Besides, as RSS chief Mohan Bhagwat cautioned, no other country has ever allowed a foreign entity to hold more than 49 per cent in its national carrier.

Few airlines make profits and Air India certainly isn’t one of them. By cutting the cord from the parent, i.e., government, chances of a turnaround may be high, but not certain. Cutting ties to the state is no guarantee of good management as well, considering instances of private players like Kingfisher and Paramount sinking into the ground. For now, capital is key and that’s why the government is looking for investors with financial muscle and not necessarily possessing technical expertise. Sweetening the deal, the government clarified that it isn’t mandatory to list the carrier within three years and that the new owner will have operational freedom. While aspects like new terms for interest-bearing debt and fundraising are being clarified, unless the government cuts ice with employee unions, the stake sale proposal is unlikely to take off.

Stay up to date on all the latest Editorials news with The New Indian Express App. Download now
(Get the news that matters from New Indian Express on WhatsApp. Click this link and hit 'Click to Subscribe'. Follow the instructions after that.)


Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on are those of the comment writers alone. They do not represent the views or opinions of or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp