‘Whoever gets it will be very fortunate’: Minister makes Air India’s sales pitch
The Parliament on August 3 passed Airports Economic Regulatory Authority of India (Amendment) Bill, 2019, that increases threshold of annual passenger traffic for major airports to over 35 lakh with Civil Aviation stating that government was committed to privatisation of Air India as its debt has become totally unsustainable.
Civil aviation minister Hardeep Puri has said that the government is determined to privatise Air India and this time it will not fail in the sale.
“It should be a total privatisation, we have to get the best possible deal and we have to get it in the shortest time available,” Puri told reporters on Thursday.
“People are interested in acquiring Air India, it’s a first rate airline, whoever acquires it will be very fortunate,” he added.
The minister also said that government will give letter of comfort to the oil companies to resume fuel supply to Air India at six airports.
The chairman and managing director of Air India, Ashwani Lohani, admitted that financials of the airline have not been very good, however loss in operational revenue has reduced and the national carrier is looking at decent operational profit this year.
“We are the airline, which has perception issue. Load factor has also increased to 82% and we should post hefty operational profit this year. We have legacy issues, issues related to merger, some we have solved while some are insolvable. But despite trouble, we are looking at launching new flights, improving first class, promote tourism and offering special packages,” Lohani said.
Puri also agreed that Air India is a first class airline with a very good safety record.
“Having said this, you might ask why we are determined to privatise it. Answer is very simple; I personally believe that government should not be in the business of running airline. Government’s determination to privatise Air India is a given, it’s undiluted. The procedure involves the formation of an alternate mechanism which is the GOM (group of ministers) and my submission to you is that has been formed. Before you reach that level, there has to be meeting at the cabinet secretary level to prepare the ground, that meeting has taken place and we will have GOM meeting in next few days,” Puri said.
Reconstituted after the NDA returned to power in May, the group of ministers is likely to meet next week to decide on the modalities of sale of the state-owned airline. The government is likely to go for 100% sale this time, people in the civil aviation ministry said.
Air India is in the grip of a major financial crunch. On August 22, Indian Oil Corp stopped fuel supply to the airline at Ranchi, Mohali, Patna, Vizag, Pune and Cochin airports, owing to non payment of dues. While flights of Alliance Air, a subsidiary of Air India, were affected, the state-owned airline itself managed by carrying extra fuel while operating to these destinations.
The GOM comprises home minister Amit Shah, finance minister Nirmala Sitharaman, commerce and railway minister Piyush Goyal and civil aviation minister Hardeep Singh Puri. The panel, named Air India Specific Alternative Mechanism (AISAM), is likely to meet next week following which a Request for Proposal (RFP) will be issued.
The airline has prepared a revenue plan for 2019-20 after incurring loss of about Rs 4,000 crore in 2018-19; it already has Rs 55,000 crore of debt on its books. With a revenue target of Rs 31,000 crore this financial year, the national carrier is targeting an operational profit of Rs 1000 crore at the least.
