GOVT TO REVIEW AI STAKE SALE PLAN SOON, SAYS SURESH PRABHU

The government will soon review a plan to sell a stake in Air India, civil aviation minister Suresh Prabhu said, weeks after the government found no takers for the beleaguered flag carrier.

The government is committed that Air India remains an independent, globally-competitive and a highly-successful airline, junior civil aviation minister Jayant Sinha told a news conference on Wednesday.

The government announced a plan in March to divest a 76% stake in Air India and offload about $5.1 billion of its debt, but prospective buyers stayed away, with some citing onerous terms as a reason for their lack of interest. Shelving the sale could exacerbate the carrier’s financial woes and hurt the government’s efforts to cut debt, analysts said, adding that then the focus, at the very least, should be on improving Air India’s operations to ensure it does not lose more money or market share.

“Government would probably wait for the right market conditions to proceed with the stake sale and probably in the meantime, they could look at offloading some of the non-core assets,” said Teresa John, economist at Nirmal Bang Institutional Equities, adding she does not expect the sale to happen before India’s general elections next year.

Air India has six subsidiaries—three of which are loss-making—with assets worth about $4.6 billion. It has an estimated $1.24 billion worth of real estate, including two hotels, where ownership is split among various government entities.The national carrier operates domestic and international flights, runs a lowcost airline and also has a groundhandling business.

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