The Hindu Business Line : AI public issue likely in second half of the year: Praful Patel

Flying high: The Minister for Civil Aviation, Mr Praful Patel, and the FICCI Secretary General, Dr Amit Mitra, in the Capital on Friday releasing the brochure of the international exhibition & conference on civil aviation ‘Indian Aviation 2008’ to be held in Hyderabad in October. —

Our Bureau

New Delhi, Jan. 11

Air India could tap the market with an initial public offering (IPO) during the second half of the year, the Minister for Civil Aviation, Mr Praful Patel, said on Friday.

Mr Patel was speaking to the media on the sidelines of the press conference to announce the holding of ‘India Aviation 2008,’ which begins in Hyderabad on October 15.

While the Minister did not give details of the quantum of equity that the airline planned to offload, airline officials had earlier indicated that 10-15 per cent of the airline equity may be divested. A portion of the IPO is likely to be earmarked for the airline employees.

An IPO could also help meet the financial commitment for the 111 aircraft that the airline is purchasing.

Air India is to acquire 68 Boeing aircraft at a cost of Rs 35,000 crore and 43 Airbus aircraft at a cost of around Rs 9,800 crore.

Meanwhile, Mr Patel plans to meet with the Minister for Finance next week to seek a reduction in custom and excise duties on aviation turbine fuel in the forthcoming Budget.

Any reduction in the duty structure would help the industry as fuel costs account for 35-40 per cent of the operating costs of airlines.

The Ministry is also organising a day-long meeting with the various State governments here on January 18 to emphasise on the growth opportunities that exist in the sector.

“The States should look to public-private partnership model for the development of airports,” the Minister said, pointing out that while there were close to 350 airstrips around the country hardly 80 of them were being used.