The government will continue to give financial support to debt-ridden Air India, subject to stringent riders on efficiency improvement till the national carrier is divested, a person privy to the discussions in the government said. A call on its eventual sale and the terms of the transaction will be taken in the second half of fiscal 2020.
The government, which is trying to meet a disinvestment target of ₹80,000 crore in fiscal 2019, will come out with a preliminary information document on to the sale of the carrier’s subsidiary Air India Air Transport Services Ltd, said the person mentioned above on condition of anonymity.
The government is of the view that it has no choice but to provide financial support if it is not to shut the carrier down but this will be subject to achieving stringent efficiency parameters, said this person.
Continued financial support has been necessitated after an attempt to sell majority shareholding in the carrier failed last year. The Union budget is likely to indicate token financial infusion to Air India for fiscal year 2020 though this could be revised.
In December, the government got the Parliament’s nod to infuse ₹2,345 crore of equity into the company after deciding in November to transfer a more than half of its ₹55,000 crore debt and non-core assets into another holding company as part of restructuring.