New Delhi: The government plans to sell shares of National Aviation Co. of India Ltd that operates Air India through an initial public offering (IPO) when market conditions improve, civil aviation minister Praful Patel said on Monday.
“If the stock markets do better than what they have been (doing) so far, then the IPO of Air India could also be considered in the near future,” Patel said after taking charge for the second straight term. “Air India will not lose its public sector (state-owned) character (post-IPO),” he clarified.
Beefing up airport infrastructure, tax rationalization and aviation safety will be priorities, the minister said.
Hopeful: Civil Aviation minister Praful Patel. Harikrishna Katragadda / Mint
Air India has sought about Rs4,000 crore in equity and debt to beef up its working capital and support the massive Rs44,000 crore fleet it brought in 2005.
Unlike in his previous tenure, which saw Mumbai and Delhi airports being handed over to private operators, Patel said he would now only allow private firms to build new airports.
An auction for an airport at Navi Mumbai will now only be completed by 2010, he said. The airport was expected to be functional by 2012-2013.
Patel discounted the possibility of the government bailing out loss-making Indian carriers but said rationalization of state taxes on jet fuel would be one of his key priorities. “These are testing times, they should not go in for reckless expansion. They should think of consolidation of their own position,” he said.
Airlines have lost an estimated $2 billion in the fiscal ended 31 March, and some such as Kingfisher Airlines Ltd and SpiceJet Ltd have said that they are open to the idea of foreign airline firms investing in Indian carriers. Government rules do not currently allow for this.
Patel said a view on this will be taken by the cabinet of ministers as it was a larger policy issue.
The country’s oldest private carrier, Jet Airways (India) Ltd, has said it was not in favour of this. “Do you want foreign companies to take over?” its chairman Naresh Goyal asked on Monday: “I am not saying yes or no (to relaxation of foreign direct investment norms),” he, however, said.