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Wednesday, December 08, 2021

GoM gives nod to invite EoI for Air India; pilot body conducts ballot on next move

The GoM also approved the airline’s plan for a share purchase agreement, a senior government official said, adding that both the EoI and the details of share purchase agreement would be issued in January itself.

Written by Aashish Aryan | New Delhi |
Updated: January 8, 2020 1:13:29 am
Air India, Air India disinvestment, Air India revenue, Air India debt, Air India loss, Air India shares, Civil Aviation Ministry, Aviation, Indian Express The plan to invite fresh bids comes nearly two months after Union Civil Aviation Minister Hardeep Singh Puri had told the Rajya Sabha that Air India would have to shut down and stop operations if it was not privatised.

A group of Ministers (GoM) led by Home Minister Amit Shah on Tuesday approved Air India’s plan to invite Expression of Interest (EoI) for the debt-laden national carrier.

The GoM also approved the airline’s plan for a share purchase agreement, a senior government official said, adding that both the EoI and the details of share purchase agreement would be issued in January itself.

The government’s plan to sell Air India, however, is likely to run into trouble with the pilots of the airline. The Indian Commercial Pilots Association (ICPA) on Tuesday decided to conduct a secret ballot to decide whether the association would go for a strike or take Air India to the National Company Law Tribunal (NCLT) over pending dues which are as high as 25 per cent.

“Despite several requests to clear our illegally withheld 25 per cent dues, there seems to be no intent to clear the dues immediately. We are being treated like bonded labour by not waiving off the notice period while not paying our salaries, flying allowances, and international layover allowance in time,” the IPCA said in its letter.

The voting is likely to take place over the next three or four days, sources in the know said.

Explained

Second attempt at stake sale, debt overhang a concern

The proposal to invite fresh EoI for Air India is likely to speed up the process of selling the airline in the next fiscal. This is the second time the Centre has approved a plan to invite bids for the airline’s sale. In 2018, the government had tried to sell 76 per cent stake in Air India, but the Centre retaining 24 per cent was seen as dissuading private players.

While a strike by the ICPA is unlikely to impact the invite for fresh EoI for Air India, a case in the NCLT will throw a spanner in the government’s plans to sell the airline.

Air India has already been dragged to the NCLT by two pilots of the airline who have claimed pending dues of close to Rs 1 crore.

This is the second time the Centre has approved a plan to invite EoI for the carrier. Air India, which has a net debt of around Rs 80,000 crore, had in 2018 unsuccessfully tried to sell 76 per cent stake.

The plan to invite fresh bids comes nearly two months after Union Civil Aviation Minister Hardeep Singh Puri had told the Rajya Sabha that Air India would have to shut down and stop operations if it was not privatised.

Puri had, in his written reply to a question, said the national carrier would, however, not be given any further “any further financial support” as that would “not be the best use of scarce financial resources” of the central government.

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