However, at a press conference on Tuesday, Puri said the airline won’t be shut down and exuded confidence that investor response would be favourable, considering Air India’s robust service network on domestic and international routes, besides its strong brand recall.
Watch: Will privatise Air India, no other option: Aviation minister Hardeep Puri
“Air India is a national asset. The Maharaja is a great brand, owns 120 aircraft, half of which are owned and the rest leased. It runs a large number of domestic routes and flies to 40-50 international destinations… We want an Indian entity to acquire it for strategic objectives," he said.
He, however, declined to comment on the government’s expectations of how much the proposed sale might fetch. “The government will make money. The government does not want to give it on a sizzling platter," said Puri.
He said airlines as well as private companies have shown interest in the sale of Air India, despite an overall risk-averse investor sentiment due to the economic slowdown.
In his response to whether the government would be able to complete the sale process by March and, if not, whether his ministry was considering shutting the airline down by June, Puri said the privatization process had already been set in motion, but “whether it happens by March or June (we will see)".
“We will be seeking expressions of interest in the coming few weeks and, hopefully, sooner than later, the process of privatization will set in," he said.
On Monday, the minister had said that privatization was the only way forward for the debt-laden airline.
In 2018-19, Air India’s net loss was provisionally estimated at ₹8,556.35 crore. Besides, it has a debt of over ₹60,000 crore, half of which has already been taken out of the books and parked in a special purpose vehicle, Air India Assets Holding Ltd. “Air India is a good asset, but the debt of the airline is not sustainable," said Puri.
The government will also soon invite bids for selling its stake in national helicopter tour agency Pawan Hans. The government owns 100% in Air India and 51% in Pawan Hans. State-controlled Oil and Natural Gas Corp. Ltd owns the remaining 49% in the helicopter company. However, previous attempts to privatize the companies did not elicit much investor interest.
The minister said the government is committed to privatizing six more airports —Amritsar, Varanasi, Bhubaneswar, Indore, Raipur and Trichy—following the recommendations of the Airports Authority of India.
In February, the government had privatized the Lucknow, Ahmedabad, Jaipur, Mangaluru, Thiruvananthapuram and Guwahati airports. Adani Group won the bids to operate, manage and develop all the airports.
Puri said land acquisition for the upcoming Jewar International Airport in Uttar Pradesh’s Gautam Buddha Nagar that will be developed by Zurich Airport was more or less complete. “About 80% of the land acquisition for the Jewar airport is complete." He added that investment by private companies in airports such as Jewar is a healthy indication of the confidence of private operators to develop Indian airports.
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