‘New turnaround plan for Air India should be cleared by Sepend’
The government has agreed to make a fresh equity infusion of ₹860 crore in Air India Ltd and provide a sovereign guarantee to the loss-making airline to raise up to ₹2,100 crore. This is over and above the airline’s turnaround plan approved in 2012, Rajiv Nayan Choubey, secretary, civil aviation ministry said.
He said the rationale is to turn around the airline as the government does not want its value to erode. Choubey also said that a new airport in Navi Mumbai will now get functional only by September 2021, against 2019 as expected before. Edited excerpts from an interview:
Why do you want to turn around Air India spending taxpayers’ money when the ultimate aim is to sell it off?
We want to turn around the airline as we don’t want value erosion (of Air India) to happen. When the environment improves, oil prices come down, and we want to sell Air India, the value of the airline should not have eroded. At present, our primary focus is to work out necessary support measures for Air India, which we are working on.
What’s the update on the government’s plans on a new turn around plan for Air India and to permit domestic airlines to raise external commercial borrowings for working capital purposes?
The SPV (special purpose vehicle) which will house the airline’s debt has been created. The new turnaround plan for Air India should get cleared by end of this month. We will take a call whether this can be done bilaterally between aviation and finance ministries or we have to go to the cabinet for approval.
Qatar Airways’ chief executive Akbar Al Baker says that the rule for foreigners to own 100% in an Indian airline is not clear?
The current policy of the Indian government is that the substantial ownership and effective control of an Indian airline should remain with Indian nationals and they will have to comply. You cannot have substantial ownership of more than 50% (by a foreign airline) because then you are violating the policy. If they think that they should have an airline that is entirely owned by Qataris, presently it is not possible. But, if they think that they can run an airline that is 49% foreign-owned and 51% Indian-owned, that is possible. They will have to find an Indian partner and it is possible.
When is the first phase of the Navi Mumbai airport expected?
We recently had a meeting with the relevant authorities on the progress of the Navi Mumbai airport. The first flight should happen in the next three years by September 2021.
When will inflight connectivity become a reality?
Trai has already given its recommendations regarding this. We met stakeholders— airlines, telecom service providers—and we along with the department of telecommunication have decided on a roadmap. The matter will be taken internally by a committee of secretaries, chaired by the cabinet secretary. We expect this process will be ompleted by October.