The government said it would take into consideration suggestions and views received from time to time before deciding on the contours of Air India disinvestment. Minister of State for Civil Aviation Jayant Sinha told the Lok Sabha that IndiGo has submitted an expression of interest with respect to disinvestment of Air India. “Suggestions and views are received from time to time, including the articles published in media, regarding disinvestment of Air India. These would be kept in mind while arriving at the final decision regarding contours of the disinvestment,” Sinha said.
On June 28, the Cabinet Committee on Economic Affairs (CCEA) gave its in-principle approval for considering strategic disinvestment of Air India and its five subsidiaries. An Air India Specific Alternative Mechanism (AISAM) has been constituted to guide the process on the strategic disinvestment and its meeting is yet to commence, Sinha said. Noting that IndiGo has submitted an expression of interest, the minister said the disinvestment of any CPSE (Central Public Sector Enterprise) is done in accordance with the laid down procedure and no response needs to be communicated at this stage to IndiGo.
While replying to questions from various members on Air India disinvestment, Sinha said the airline has been facing losses for the past many years not only on account of merger with Indian Airlines but also due to multitude of other factors. These include high fuel prices, interest burden, debt-equity ratio, airport user charges and increasing competition, especially from low cost carriers, he added.
Citing per provisional estimates, the minister said Air India is expected to post a net loss of INR 3,643 crore in 2016-17 period. At the end of March this year, the airline’s total debt stood at INR 48,876.81 crore as per provisional figures, he noted. According to Sinha, in comparison to the total insurance premium paid, the premium paid on grounded aircraft by Air India is negligible and is reducing year by year. “Also, in the case of grounded aircraft, Air India is required to pay only 30 per cent of the flying premium rate,” he added.
