Air India’s disinvestment process will be completed by June this year, the Ministry of Civil Aviation has told the Department-Related Parliamentary Standing Committee on Transport, Tourism and Culture. The minstry’s submission was made to the House Panel during the discussions for preparation of the report on the ministry’s Demand for Grants (2018-19).
“For the year 2018-19, the Government has approved a sum of Rs 650 crore as equity infusion for AI under the TAP (turn-around plan)/FRP (financial restructuring plan). This amount is allocated by Ministry of Finance for the period up to June 2018 as disinvestment process is likely to be completed within this timeline,” according to the ministry’s reply in the said report.
The government has appointed consultancy firm EY as the transaction advisor for Air India’s strategic sale. The minister also said that Air India would be offered to potential buyers as four different entities – Air India, its low-cost arm Air India Express and subsidiary AI-SATS would be one entity, while regional airline Alliance Air would be a separate entity. Apart from these, Air India Air Transport Services Ltd (AIATSL) and Air India Engineering Services Ltd (AIESL) would be sold separately, he added.
The Union Cabinet, in June last year, granted an in-principle approval for the strategic sale of Air India and its subsidiaries and this process is being monitored by Air India-Specific Alternative Mechanism headed by finance minister Arun Jaitley. Last month, The Indian Express reported that one of the primary concerns associated with the airline’s strategic disinvestment – its Rs 48,000-crore debt – may be taken off the taxpayer’s plate as the Centre plans to bundle the liability as part of the sale of the airline.
On Tuesday civil aviation minister Ashok Gajapathi Raju told Rajya Sabha that Air India had “shown a considerable improvement in operational/financial parameters during 2016-17 vis-a-vis 2011-12”. He also said that the airline’s operating loss has consistently reduced since 2011-12, and in 2016-17, the company posted an operating profit of Rs 298.03 crore.