Describing Air India as a “first-class asset”, Civil Aviation Minister Hardeep Singh Puri told the Lok Sabha that following the shut-down of Jet Airways, Air India has become “an even more attractive acquisition”.
“Air India is a first-class asset. It has 125 planes; it owns half of them. It flies to 40 international destinations and 80 domestic destinations and it is doing extremely well. The problem is that it has unsustainable debt burden. It is the servicing of that debt burden which is the problem insofar as Air India is concerned,” said Puri adding provisional figures show that Air India’s operating loss in 2018-19 is over Rs 7000 crore.
Stating that the government to ensure the benefit of Indians, the national carrier will remain in Indian hands, Puri added, “The Government is committed to the strategic disinvestment of Air India. We believe that Government’s scarce resources should be utilised in other development schemes and this is an area where privatisation or disinvestment will work…In fact, after Jet Airways ceased operation, Air India becomes an even more attractive acquisition.”
Puri was replying to a question by Shiv Sena MP Sanjay Mandlik on why despite increasing number of air passengers, Air India’s market share is on the decline.
Puri said that while the airports are doing well, airlines operate on thin margins owing to high capital costs and uncertainty caused by geo-political factors.
He cited the closure of Pakistani airspace which has led to Air India shouldering a loss Rs. 430 crore as one such instance.