The Government is keen to push the divestment of its stake in Air India as a step towards introducing reforms in the domestic aviation sector.

“The Government has done a lot to involve the private sector in the domestic airport sector. This experiment has helped provide funds which have been used for development of other airports,” said a person in the know of the current developments when asked about the objective of divesting government stake in Air India.

The funds generated from Air India’s divestment will be used for developing other sectors which are the government’s priorities. The divestment will also save money for the government, which till now was used for pumping money into Air India.

Minister of State for Aviation Hardeep Singh Puri told the Lok Sabha on June 27, 2019 that the government had infused ₹5,780 crore in to Air India in 2014-15, ₹3,300 crore in 2015-16, ₹2,465.21 crore in 2016-17, ₹1,800 crore in 2017-18 and another ₹3,975 crore in 2018-19. The Minister’s statement shows that Air India reported a loss in all the five years with the loss varying from ₹5,859.91 crore in 2014-15 to ₹7,635.46 crore in 2018-19.

What is clear at the moment is that the government intends to put the almost its entire stake in Air India, Air India Express on sale.

To sweeten the deal, the government is also planning to clear the airline’s liabilities worth around ₹20,000 crore including forward booking worth about ₹2,000 crore.

At the moment Air India’s current debt and liabilities stand at ₹82,000 crore. Of this, the government has already taken on about ₹29,400 crore of the debt.

However, those in the know declined to get into specifics of the time line by when the Expressions of Interest (EoI) for Air India’s stake will be put out in the public domain, apart from saying that things were being finalised and the EoI will be issued soon.

It was, however, made clear that the interested parties will be given at least 45 days to study the documents. Also the deadline could be extended by 15 days as has been done in the past.

However, aircraft that are used to carry VVIPs such as the President, Vice-President and Prime Minister will not be sold as part of the current divestment plan.

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