Reviving Air India through disinvestment

Rituparna Dutta

The ₹60,000 crore debt-ridden public airline, Air India is all set to address a new timeline for the disinvestment and financial bid in the upcoming days. Since 2017, the GoI is in a process to sell the loss running airlines service that cumulates losing of ₹20 crore each day and puts a direct crunch on government’s treasury.

While attaining a session at the Times Network India Economic Conclave, Minister for Civil Aviation Hardeep Singh Puri, reportedly said, the bidding session is soon to be conducted and will be open up for 64 days. Stressing on the vitality of the disinvestment process, Mr.Puri stated if the state-run carrier is not sold, it needs to be shut down as the government cannot keep on pouring public money in Air India that has been in debt for the past 14 years. “After all its public money, and I don’t have the capacity to keep on going to Nirmala Ji and say please give me some money,” said Puri.

Initial attempts were made to privatise Air India in 2000 and 2001, but, due to extensive political turbulence the idea had to be dropped. In 2007, the former government had merged Air India and Indian Airlines, forming the Air India Limited. It is to be noted, back in 2007 both the airlines were running at a loss of ₹770 crore. Later, in 2009, the loss went further and stood to ₹7,900 crore. The then civil aviation minister Ajit Singh in 2013 had recommended for fully privatising the airlines in order to survive it.

Over the years while the government was unable to take any progressive steps, Air India’s cumulative debt stood to a whopping ₹50,000 crore in 2017. After studying rigorous economic reports, the government had finally sealed to sell its 100 percent share from the state-run carrier that is battling hard to sustain in the domestic competitive market.

As per civil aviation statistics, Air India incurred a net loss of ₹29,369.37 crores in the last six years. Air India Chairman Rajiv Bansal had even stated that in FY 2019-20, the airlines has suffered cash loss of ₹36,000 crore. During the FY 2020, despite making a revenue of ₹27,710 crore, total expenses stood to ₹36,290 crore.

Founded in 1932, by the Tata, Air India has a deep historical link in the development of aviation sector. The downfall of the National carrier is supremely vested on mismanagement issues and rigidity of prompt decision making process. While the commercial airline groups widened their viability, Air India Limited remain puzzled on its operational balances. For the past more than a decade, taxpayers money are infused as equity support to run Air India.The merge of both the airlines in 2007 is studied to be the main reason for the fall of Air India.

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