Business

Not The Right Time To Disinvest In Air India, Revival Possible In 5 Years: Parliamentary Panel

DIVYIA ASTHANA | 0
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| January 7 , 2018 , 14:34 IST

Bogged down by debt, the national carrier Air India has been under consideration for a possible disinvestment by the government and likely privatisation. However, according to a parliamentary panel, this is not an appropriate time to divest the government stake in Air India, which should be given at least 5 years for revival.

The panel reportedly concluded that the equity infusion in the national carrier, as part of the turnaround plan (TAP), was made on a "piece meal basis" which adversely affected its financial and operational performance, "forcing" the airline to take loans "at a higher interest rate to meet the shortfall".

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Therefore, the Parliamentary Standing Committee on Transport, Tourism and Culture concluded that the government should either reconsider its decision to privatise or disinvest Air India or consider possibility of "an alternative to disinvestment of our national carrier which is our national pride".

The Committee noted that Air India had always "risen to the occasion" at times of need, whether the need by social, political or calamities in India or internationally, and that "it would be lopsided to assess and evaluate the functioning of Air India solely from business point of view, as has been done by the NITI Aayog."

In addition, several of the subsidiaries of the national carrier, including Air India Air Transport Services Limited (AIATSL), Air India SATS Airport Services Private Limited (AISATS), Alliance Air and Air India Express are already making profits.  

As of March 2017, Air India has a total debt of around Rs 48,877 crore, out of which about Rs. 17,360 crores were aircraft loans and Rs. 31,517 crores were working capital loans.