June 19, 2018 TnH Global 0

Fresh bid to revive Air India

Union minister Arun Jaitley along with his senior ministerial colleagues and officials on Monday discussed the future course of action for debt-laden Air India, weeks after its strategic disinvestment proposal failed to attract any bidders, sources said.

The meeting was attended by Piyush Goyal, who has been temporarily given the charge of finance ministry, civil aviation minister Suresh Prabhu, transport minister Nitin Gadkari and other senior officials.

According to the sources, the meeting, chaired by Jaitley by video-conference, took stock of the developments related to the ailing national carrier. The report prepared by consultancy EY, the transaction adviser for Air India’s strategic disinvestment, was discussed.

The report has listed out the reasons for the disinvestment failing to elicit any initial bids as the deadline ended on May 31. Last week, a source had said the government was considering the listing of the troubled airline after the proposal for a 76 per cent strategic stake sale failed to attract any bidders.

When asked about the meeting and whether any decision was taken with respect to Air India, civil aviation secretary R.N. Choubey said the Department of Investment and Public Asset Management (Dipam) would issue a statement on the matter.

The government reportedly was even willing to write off part if Air India’s huge loan to make the carrier attractive. The BJP-led NDA is under pressure from the Swadeshi Jagran Manch to drop the divestment proposal, with the Lok Sabha elections due next year.

Swadeshi Jagran Manch convener had said, “We feel that the injection of money and efficiency could turn around Air India and earn us handsome profits … the economy and the aviation market is looking up, we should let Air India ride that cloud,” he added. In a major setback, the government on May 31 said no initial bids were received for the proposed stake sale and that various options would be explored.

The government proposed to offload 76 per cent equity share capital of the national carrier as well as transfer the management control to private players, as per the preliminary information memorandum. The transaction would have involved Air India, its low cost arm Air India Express and Air India SATS Airport Services Pvt Ltd.

The latter is an equal joint venture between the national carrier and Singapore-based SATS Ltd. Meanwhile, passenger traffic in Indian airports in April registered a growth of 21.7 per cent over the corresponding month last year, latest figures by the Airport Authority of India said. Domestic traffic grew 25 per cent and international traffic by 10.2 per cent in April, with the overall passenger movement being recorded at 28.22 million, the AAI said.