The government has not given up plans for privatisation of Air India but it has been kept on hold, Vinod Hejamadi, Director-Finance, Air India, said on Tuesday.

Participating at the India Aviation Summit 2019, he said that the government deferred the divestment process as the market conditions were not right. The summit has been organised by the Centre for Asia Pacific Aviation (CAPA).

“There are mixed feelings among employees. Of course, everyone will like it to be government-owned but people also realise that the airline cannot be with the government forever,” Hejamadi said when asked how employees were looking at the divestment plan for the airline.

Financial turn-aroud

He added that the government’s decision to give off the airline to a special purpose vehicle will help Air India save around ₹3,000 crore which will help it turn around financially.

The official outlined a number of steps which the airline has been taking to improve its operations and financial performance.

Hejamadi said that almost $100 million had been invested in the engineering department which has helped bring around 14 aircraft into the airline’s fleet. He added that the airlines was also hopeful of ensuring that its aircraft were able to be flown for more hours than they were presently.

Focus on non-metros

The airline officer said his personal view was that there was over capacity on the Delhi-Mumbai route adding that Air India’s focus was on adding flights to tier-II and -III cities.

Justifying this decision, Hejamadi said that on the Shirdi-Mumbai route the fares were around ₹5,000-7,000, while on a metro route like Delhi-Mumbai involving flying close to two hours the fare was about ₹3,500.

Air India will also look to operate more flights to international destinations including Melbourne.

Related Topics
comment COMMENT NOW