The Indian government has reaffirmed its intention to sell the country's ailing national carrier Air India, with Civil Aviation Minister Hardeep S Puri saying that it "is not the government's business to run airlines and hence Maharaja must go to a private player."
While Mr Puri added that the Air India brand will remain Air India, he said that a disinvestment plan is expected to be placed before a ministerial body which will be headed by Union Home
Minister, Amit Shah. A final decision is expected soon on the timing, price and amount of shares of Air India to be sold.
Earlier attempts by the government to get a suitable buyer for the state-run airline, which faces cash and payment dues of Rs 58,000 crore (US$8.5 billion), have remained unsuccessful.
India, for years, has propped up the debt-laden airline by infusing equity to keep it alive - the government injected US$553 million into Air India in the fiscal year that ended on March 31.
A government official told Reuters in July, that the government expects to get US$2.1 billion from selling the airline.
Earlier this month, three Indian oil companies - including Indian Oil Corp. (IOC) - suspended sale of jet fuel to Air India at six domestic airports, because the carrier has been missing payments for several months.
The airports include Mohali in the north, Vishakapatnam and Kochi in the south, Pune in the west and Ranchi and Patna in the east. The suspension also applies to fuel for Air India subsidiary Alliance Air. Air India normally pumps about 250,000 liters of fuel per day at these six airports.
Performing very well??
India's aviation sector has been facing turmoil in the past 12 months with one of its biggest private carriers, Jet Airways in bankruptcy and boardroom disputes at budget airline IndiGo, while passenger growth in the market overall has slowed. Adding to the turmoil in the sector are a depreciating rupee and increasing fuel prices.
Despite recent developments, the Press Trust of India (PTI) quoted an Air India spokesman as saying last week that the company is moving towards better profit. “Our financial performance in this fiscal is very good and we are moving towards a healthy operating profit. The airline despite its legacy issues is performing very well.”
Nol van Fenema