Home / Companies / News /  Govt to prepare Air India revival plan within 3 months, amid calls for privatization

New Delhi: The civil aviation ministry will come up with a roadmap for the rejuvenation of debt-laden Air India Ltd within the next three months, a government official said on Tuesday.

The airline is currently running on a bailout package which has infused Rs25,000 crore over the past few years, and another Rs25,000 crore is expected over the coming decade.

“In the next three months, we expect there would be clarity on the way forward," the government official, who did not want to be named, said.

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The official, however, indicated this could be a long-haul process. “Now how much time that way forward will take, that’s a different thing," he said about the execution of any new recommendations beyond the existing turnaround plan.

At a press conference organized to mark three years of the National Democratic Alliance government, civil aviation minister Ashok Gajapathi Raju said on Tuesday that government think tank NITI Aayog recently submitted its recommendations on Air India to the ministry. “NITI Aayog has made recommendations for making Air India strong and viable. All courses of action are being examined. We have not closed any option," Raju told reporters.

Finance minister Arun Jaitley said over the weekend that the government was open to the option of bringing a strategic investor into the airline.

Raju did not elaborate on the recommendations, but said all possible alternatives would be looked into and no option had been closed as yet.

Qatar government-owned Qatar Airways has said it hopes to start an airline in India, Mint reported on 24 January.

Raju denied there is any connection between Qatar’s interest and the government’s remarks on Air India’s potential disinvestment. “Let me tell you one thing—we are proud of Air India. This kind of speculation...we don’t like to put ourselves down," he said.

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The state-owned airline has a debt of about Rs50,000 crore, of which about Rs25,000 crore are loans taken to buy aircraft. Air India reported a loss of about Rs3,587 crore in 2015-16, compared with a loss of Rs5,859 crore in the previous fiscal year.

The Economic Survey 2017 recommended that the government privatize Air India.

Debt piled up and losses mounted at Air India following an aircraft deal worth $11 billion around 2005 and a botched merger with erstwhile domestic carrier Indian Airlines. The Central Bureau of Investigation (CBI) is probing what went wrong.

Raju said the airline will cooperate with the CBI probe that would extend to the previous United Progressive Alliance government. Air India is the single biggest global carrier from India with a 17% market share. It controls 14.6% of the domestic passenger market, which has eroded over time as private airlines expanded capacity.

“As far as Air India is concerned, it’s a very difficult question. When I was the disinvestment minister in 1999-2000, I had said please disinvest Air India, otherwise there will be nothing left to disinvest. This was some 18 years back," Jaitley said in comments telecast over the weekend by Doordarshan. “So, history has given us a second chance that a good investor should come, which has credibility so civil aviation ministry will consider it (disinvestment)."

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