oppn parties Privatizing Air India Might Succeed This Time

News Snippets

  • Supreme Court approves two-child norm for government jobs in Rajasthan
  • DMK issues rocket ad with Chinese flag, PM Modi slams party
  • BJP alleges that Congress workers raised slogans like 'Pakistan jindabad' outside Karnataka assembly after the results for the RS polls were declared. CM Siddaramaiah promises stern action if claim found true
  • Calcutta HC says any agency can arrest absconding Sandeshkhali TMC strongman Sk Shahjahan
  • Himachal Pradesh Speaker suspends 15 BJP MLAs for unruly behaviour
  • Joint teams of Navy, NCB and Gujarat ATS seized a boat with 3200kgs of narcotics in high seas off Gujarat coast. Five crew members were also arrested
  • Centre tells Supreme Court that economic disaster will follow if states are allowed to tax mineral land
  • NCLT asks Byju's to keep rights issue funds in a different account
  • Sunil Bharti Mittal of Bharti Enterprises was conferred the honorary Knighthood by Britain's King Charles III for services rendered in furthering business relations between the UK & India
  • RIL to merge Viacom18 with Disney's Star in $8.5bn deal, Nita Ambani to lead the board of merged entity
  • Vodafone Idea shares fall nearly 15% over fears of huge fund raising
  • Stock markets crash on Wednesday: Sensex loses 790 points to 72304 and Nifty 247 points to 21951
  • BCCI gets tough, removes Shreyas Iyer and Ishan Kishan from central contracts for missing Ranji Trophy. In a first, it starts fast bowling contracts to reward emerging players like Akash Deep and four others
  • Tennis: Sumit Nagal loses in first round of Dubai Duty Free tournament
  • WPL: UP Warriorz beat Mumbai Indians by 7 wickets
Bengal police arrests TMC leader Sk Shahjahan, the prime accused in the Sandeshkhali disturbances
oppn parties
Privatizing Air India Might Succeed This Time

By Ashwini Agarwal
First publised on 2020-12-16 07:03:02

After a number of false starts, including the last attempt to sell which resulted in not a single bidder coming forward, it seem that the government will finally get Air India off its back. The changed terms in the bidding process have attracted multiple EOIs, including one from the Tatas and another from some employees of the airline.

This is an excellent development. It should have happened a lot earlier. But the government had erred in the past by putting too many conditions for bidders and not wanting to let go of 100 percent ownership of the airline in the past. This time around, the airline along with its subsidiary Air India Express is up for 100 percent disinvestment. Added to this is 50 percent ownership of Air India SATS Airport Services. The government has now transferred Rs 29,464 crore from the huge debt run up by the airline to a special purpose vehicle and allowed the potential bidders to account for the rest while valuing the business.

Air India has been a drain on the exchequer. It ran up debts of Rs 58,256 crore till the end of FY 2019. With the pandemic having a severe impact on airlines this year, this figure must have ballooned further. Hence, any disinvestment process must be pragmatic enough to account for this and give breathing space to the bidders. Along with this, the government must also look into the matter of the employees and ensure they get a fair deal.

Whoever wins the bidding process and takes control of the airline will get huge ready-made infrastructure, licenses and permits. Hence, if the terms are good, the bidders will quote the price at which they will be comfortable to buy and run the airline. The government must be pragmatic in the next stages too and sell the airline with minimum fuss to get funds that can be productively used in other welfare schemes or infrastructure projects.