House panel may tell govt not to privatise AI, give 5 yrs for revival

NEW DELHI: This is not an appropriate time to divest government stake in Air India (AI), which should be given at least five years to revive and its debt written off, a parliamentary panel is likely to tell the government.

The panel is also understood to have concluded that the equity infusion in the national carrier, as part of the turnaround plan (TAP), was made on a “piecemeal basis”, adversely affecting its financial and operational performance and “forcing” the airline to take loans “at a higher interest rate to meet the shortfall”.

In a bid to revive the embattled national carrier, the government in June last year initiated a process for its strategic disinvestment. Air India had received about ~26,000 crore under a bailout package sanctioned by the previous UPA government. It had a total debt of about ~48,877 crore at the end of March 2017.

The Tata group, Singapore Airlines and Indigo have expressed interest in the airline.

The Parliamentary Standing Committee on Transport, Tourism and Culture concluded that the government should review its decision to privatise or disinvest AI and explore the possibility of “an alternative to disinvestment of our national carrier which is our national pride”.

Observing that AI has always “risen to the occasion” at times of need like calamities, social or political unrest in India or abroad, the committee said “it would be lopsided to assess and evaluate the functioning of Air India solely from business point of view, as has been done by the Niti Aayog”.