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  India   All India  31 May 2017  All options open on Air India: Ashok Gajapathi Raju

All options open on Air India: Ashok Gajapathi Raju

THE ASIAN AGE.
Published : May 31, 2017, 1:28 am IST
Updated : May 31, 2017, 1:32 am IST

Niti Aayog gives recommendations for ‘strong, viable’ AI

Civil Aviation Minister Ashok Gajapathi Raju (Photo: PTI)
 Civil Aviation Minister Ashok Gajapathi Raju (Photo: PTI)

New Delhi: Civil aviation minister Ashok Gajapathi Raju on Tuesday said that his ministry was examining the Niti Aayog’s recommendations on Air India’s future — to make it a “strong and viable” airline — hinting again at the possibility of disinvestment or even outright privatisation of the national carrier.

Top government sources said Air India’s fate will be decided in the next three months as the ministry will hold intense deliberations on Niti Aayog’s recommendations before deciding on a course of action.

 

“The Niti Aayog has made recommendations for making Air India strong and viable. All courses of action are being examined. We haven’t closed any option,” Mr Raju told reporters.

When asked about the options on the table, minister of state for civil aviation Jayant Sinha, who was also present at the briefing, held to highlight the BJP-led government’s achievements in civil aviation in the past three years, said: “We can’t disclose now beyond this point.”

Sources said the ministry had begun deliberations with Air India on the Niti Aayog recommendations, but expressed confidence that a way will be found to ensure that Air India survives. Air India has incurred losses worth thousands of crores but is surviving on a government bailout package of Rs 30,000 crore that began during UPA-2’s tenure and is continuing under the NDA government. This amount may go up to Rs 50,000 crore in the next five years, with sources saying the government had infused equity of around Rs 25,000 crore into Air India in the past five years.

 

Air India has a debt burden of at least Rs 45,000 crore and a large part of it is due to loans taken (about Rs 22,500 crores) for acquisition of a total of 111 aircraft (68 for Air India and 43 for the erstwhile Indian Airlines) in 2005-06. A financial turnaround plan was put in place for the airline in 2012, but the NDA government, after three years in office, is now convinced this will not be enough to pull the airline out of its financial woes.

Mr Raju had recently spoken of “legacy issues”, a reference to the large debt that fell on the airline in over a decade. Though Air India reported an operating profit of Rs 105 crore in 2015-16, these huge debts are still insurmountable.

 

Tags: niti aayog, air india