A Group of Ministers (GoM) will meet today in New Delhi to discuss the disinvestment of Air India. The ministers are likely to decide the contours of the Expression of Interest (EoI) which is expected to be issued in mid-January.
According to an Air India official, Home Minister Amit Shah, Finance Minister Nirmala Sitharaman, Railway Minister Piyush Goyal and Civil Aviation Minister Hardeep Singh Puri are likely to attend the meeting,
The person said, “This is the second round of meeting to discuss the disinvestment of Air India. During the course of the meeting, a roadmap and the dates of floating the advertisement for the Expression of Interest (EoI) will be discussed.”
The government was supposed to announce the date for floating of the EoI in the first week of January, but, Puri had said earlier this month that the date would be announced in mid-January.
Privatising Air India
The national carrier has been facing acute cash crunch for the past few fiscals. Air India has a debt book of around ₹60,000 crore, including the total current liabilities of ₹15,000 crore to vendors, lessors, employees, airport operators.
The Modi government had announced last year that they were willing to privatise the airline and thus, were looking at a disinvestment in the company. “A detailed plan and contour related to the stage prior to the EoI will be discussed. 45 days after the plan is approved, the EoI date is floated”.
The government has been planning to sell Air India and Air India Express together and Alliance Air separately. Interestingly, among all three airlines, Air India Express is the only profitable airline at the moment.
When asked if selling Air India Express separately would make sense, the source said, “ideally,” it made sense. However, with dismay, he added, “but that’s their plan.”
It was reported earlier that the Tata company was interested to invest in a stake for the airline, however, the senior official said that it did not look like the company was interested in Air India. The official had further added that they would be looking for potential buyers globally.
Rise in FDI limit
Last month it was reported that the government was contemplating a budget announcement to hike the Foreign Direct Investment (FDI) limit in the aviation sector from 49 per cent to 100 per cent to attract international bids for Air India.
Since the airline was struggling to stay afloat, it will be imperative for the government authorities to take a prompt decision before the airline goes belly up.