The government of India has put on hold plans to sell a stake in debt-laden state-run carrier Air India because of high oil prices and volatile foreign currency movements. The country's junior civil aviation minister, Hardeep Singh Puri, said in parliament that "The present environment is not conducive to stimulate interest amongst investors for strategic disinvestment of Air India in the immediate near future" and the government will revisit the sale once global economic conditions become more conducive.
Despite the fact that the government in the meantime has hived off a part of the airline's debt, about Rs 300,00 crore (US$4.34 billion), into a separate entity and is trying to sell off some of
its assets and subsidiaries, and has injected Rs 3,975 crore rupees into the airline in fiscal year ended March 31. Air India is still expected to report a loss of more than Rs 7,600 billion for
the same year, Puri told parliament.
The Economic Times reported that India's aviation sector is facing turmoil with one of its biggest private carriers, Jet Airways, facing bankruptcy, while passenger growth in the market overall has slowed.
Staff launch bid for insolvent Jet
In a surprise move and coinciding with a request that creditors of Jet Airways submit their final claims on or before July 4, a Jet Airways Employee Consortium and AdiGroup on Friday announced a partnership to bid for 75% of the airline under an as yet undisclosed scheme whereby every single employee of Jet Airways will become an owner of the airline.
The airline owes over Rs 8,500 crore (US$1.3 billion) to a consortium of 26 banks led by State Bank, and over Rs 13,000 crore to the tens of hundreds of vendors and around 23,000-odd employees.
At press time it was unclear how the consortium would finance its bid for the airline.
Nol van Fenema