Financial Daily from THE HINDU group of publications
Thursday, Dec 12, 2002
Industry & Economy
Logistics - Airlines
`Domestic carriers sell-off will be taken up at right time'
NEW DELHI, Dec. 11
THE Ministry of Civil Aviation is not against the disinvestment of Air India and Indian Airlines but would like them to be taken up at the right time, the Minister for Civil Aviation, Mr Syed Shahnawaz Hussain, said here today.
"There is no proposal for disinvestment of AI and IA at the moment. The Ministry of Disinvestment has not yet been asked to start the process for disinvestment right now. Our feeling is that given the global aviation scenario it will be better to strengthen the two airlines and then consider the issue of disinvestment," Mr Hussain said.
On the issue of disinvestment of AI, Mr Hussain said that even before the incidents of September 11 affected the industry, there were no buyers for the Maharaja and the situation was no different now.
The Minister was speaking to newspersons on the sidelines of an international conference on `Aviation and tourism: Strategy in changing business environment,' which was organised by the Foundation for Aviation and Sustainable Tourism (FAST).
Besides, the Government is already taking steps to strengthen the two airlines, with proposals for both AI and IA likely to be placed before the Cabinet Committee on Security (CCS) shortly, Mr Hussain said.
Despite the fact that financial and technical bids have not yet been received for AI's purchase of 17 aircraft, the Minister indicated that all attempts would be made to complete the acquisition process during the current financial year.
However, Mr Hussain added that there were several other issues, including the Ministry of Finance releasing Rs 325 crore towards the fleet acquisition plan of IA. The Minister said that without the funds being released, it would be difficult for IA to purchase aircraft.
On the issues affecting the domestic aviation industry, the Minister said that a committee had been set up to look into various aspects affecting the industry. The report was expected to be submitted within the next 15 days, Mr Hussain said.
As regards the privatisation of the four metro airports, Mr Hussain said that the successful parties would have to form joint ventures for running the airports. "The Airports Authority of India will hold some percentage of shares in the joint venture. However, security and air traffic control will remain with the Government," he said.
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