AI in­vested on dis­in­vest­ment?

In view of the Niti Aayog and Fi­nance Min­istry sug­gest­ing pri­vati­sa­tion of the na­tional car­rier, there are lots of ques­tions aris­ing over the need of this step and how it would pan out, if at all.

TravTalk - India - - BULLETIN - NISHA VERMA

Union Fi­nance Min­is­ter Arun Jait­ley re­cently sug­gested dis­in­vest­ment of Air In­dia ow­ing to the debt the airline has till date. This comes af­ter Niti Aayog—the govern­ment think tank—had rec­om­mended strate­gic dis­in­vest­ment re­cently, claim­ing that the cen­tre does not need to put in more money into the PSU de­spite it be­ing in debt of around ` 50,000 crore.

P. Ashok Ga­jap­athi

Raju, Union Min­is­ter, Civil Avi­a­tion, re­port­edly said, “Niti Aayog has made a rec­om­men­da­tion for the course of ac­tion for Air In­dia. They have sug­gested to take steps to make it a strong and vi­able airline.” He re­vealed that they were ex­am­in­ing all cour­ses of ac­tion to en­sure this and they are not closed to any op­tions. Sim­i­lar thoughts were echoed by Jayant Sinha, Min­is­ter of State for Civil Avi­a­tion.

R.N. Choubey, Sec­re­tary, Civil Avi­a­tion, claimed that the govern­ment’s pri­mary fo­cus is to deal with the debt. “I don’t think it’s easy to have a strat­egy for Air In­dia right now. Sell­ing the airline would of course be dif­fi­cult be­cause of the debt over­hang it has. There are rec­om­men­da­tions com­ing from all quar­ters, but the sin­gle most im­por­tant thing is how to han­dle the debt. Once we find a so­lu­tion to that, which will re­quire huge buy-in by the fi­nance min­istry and the banks, then we can have a few op­tions avail­able, and we will de­cide what to do. If we solve the debt prob­lem, we will see if there is still the need to pri­va­tise Air In­dia, as there are many peo­ple who want the govern­ment to re­tain the airline in its fold,” he said.

Say­ing that debt re­struc­tur­ing or debt swap is also an op­tion, Choubey claimed that all this comes af­ter a de­ci­sion is taken by the min­istry, which is still not clear. “Right now, as an op­tion, there are other as­sets with Air In­dia as well. If the govern­ment takes a de­ci­sion to sell it, they will see if its gets more money by sell­ing all the as­sets to­gether or by sell­ing all of them sep­a­rately but si­mul­ta­ne­ously. That is a de­ci­sion the govern­ment will take af­ter a trans­ac­tion ad­vi­sor analy­ses things.”

Speak­ing on the Fi­nance Min­is­ter’s state­ment, Choubey said that the min­is­ter was only shar­ing his views. He in­sisted that stop­ping in­vest­ments in Air In­dia is only half the so­lu­tion, as it could lead to the sink­ing of the airline. The other half of the prob­lem is yet to be solved.

How­ever, he as­serted that the em­ploy­ees’ in­ter­est will be com­pletely pro­tected in ev­ery sce­nario. In fact, he said that man­power ex­penses are not a prob­lem with Air In­dia. “There has been no re­cruit­ment in Air In­dia for the last 20 years, ex­cept for pi­lots and cabin crew. As a re­sult, the per air­craft to man­power ra­tio is about 120:125 which is com­pa­ra­ble to any other airline. Twenty years back, it was twice this num­ber. Thus, now ow­ing to low man­power, at least that one bur­den is not there. We only have to han­dle the debt bur­den, not the man­power bur­den,” he added.

Niti Ayog has sug­gested to take steps to make Air In­dia a strong and vi­able airline If we solve the debt prob­lem, we will see if there is still the need to pri­va­tise Air In­dia

P. Ashok Ga­jap­athi Raju Union Min­is­ter Civil Avi­a­tion R.N. Choubey Sec­re­tary Civil Avi­a­tion

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