BackIATA wonders how much leeway an investor will have in Air India
IATA director general and CEO Alexandre de Juniac says the government would be in a better position to analyse why the Air India stake sale process failed
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New Delhi: With the Air India disinvestment failing to take off, global airlines’ grouping International Air Transport Association (IATA) has said that a carrier has to be “nimble and flexible" even as he wondered how much leeway an investor would have in managing a government-owned airline. Air India is a member of the IATA, which represents more than 280 airlines across the world.
In an interview to Press Trust of India, IATA director general and CEO Alexandre de Juniac said the government would be in a better position to analyse why the Air India stake sale process failed.
“How much leeway would an investor of a government-owned airline have in managing the airline as a normal business," de Juniac said when asked about the Air India disinvestment process.
Also read: Why it became impossible to get bids for Air India
The airline industry operated in “a fiercely competitive environment". “There is a need for an airline to be nimble, flexible and responsive to passenger needs," de Juniac added.
According to the IATA chief, there is a need to have a conducive environment for airlines to do business. Even with the growth potential of the Indian market, airlines are operating in a challenging environment, given the huge tax burden, government’s micromanagement of the airline service offerings and high fuel prices.
Also read: Air India fails to find another sucker
The proposed 76% stake sale in Air India did not attract any bidders in May. There were speculations that the government’s decision to retain stake in the debt-laden carrier might have kept away potential investors.
In June, the government made it clear that it was committed to strategic disinvestment of Air India. Under the proposed plan, the government was to sell 76% stake in Air India along with complete divestment of low-cost arm Air India Express Ltd and a 50% stake in Air India SATS Airport Services Pvt. Ltd—an equal joint venture with Singapore’s SATS.
Also read: How the Air India disinvestment should be carried out
With inputs from PTI
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