On Sunday, to nobody’s surprise, the last date of bids for Air India was extended for the third time—to 31 August. This was done in response to requests from would-be bidders, according to its current owner, the central government. This suggests private interest in buying it. Yet, given how badly covid-19 has compressed demand for air travel, even if it finds buyers, it seems unlikely to sell for anything more than a pittance. It may be best, therefore, to call off the process entirely. The Centre’s ₹2.1 trillion disinvestment target this fiscal year was rendered unrealistic by the covid crisis anyway. If met it must be, then other stake sales would have to do it.
An Air India sale had failed back in 2018, too. The deal on offer is much sweeter now, sure, but the crisis of our times has also reminded us of the value of a state-run carrier in aiding national missions, such as rescuing citizens stranded overseas. Moreover, civil aviation is an industry that relies on resources allotted by the state, such as air corridors, has steep entry barriers, and faces many other capacity constraints. This makes the market vulnerable to private monopolization, which a state carrier can keep in check.