New Delhi: Government could divest its stake in national carrier Air India through a public issue in the second half of 2008, Civil Aviation Minister Praful Patel said Friday.
“We may consider issuing an IPO (Initial Public Offering) in the second half of this year,” he said after announcing the launch of the first-ever civil aviation airshow , India Aviation 2008, being planned in Hyderabad in October.
About 10-15 % of the merged entity’s equity is likely to be divested to enhance the carrier’s equity base, he had said earlier, adding that employees stock option would also be considered during the dilution of equity.
Sources said the IPO would be considered when the process for merger of the two erstwhile national carriers takes shape. The IPO would depend purely on the prevailing market conditions at that time, they added.
The merged Air India, which has already ordered a total of 111 aircraft from Boeing and Airbus Industrie, is planning to place additional orders for planes, the number of which could be about a hundred.
To questions on the rising prices of jet fuel, Patel said he would meet Finance Minister P Chidambaram next week to seek reduction in custom and excise duties on aviation turbine fuel, whose prices in India are one of the highest in the world. He has also urged state governments to reduce sales tax on ATF.
Fuel costs amount to almost 35-40 % of the total operating cost of airlines.