Air India in turbulent air, may be sold off to private buyer

Air India has incurred a debt of Rs 52,000 crore, which is borne by the taxpayer  The government is planning to sell off its stakes in the airline, as a means to end the burden  However, there are fears that no one may agree to buy the ailing airline for a reasonable cost

The NDA government has decided to sell its shares in Air India, given the debt of Rs 52,000 crore it has incurred. This is twice more than the value of all the aircraft of the company sold together.

However, the government has not yet decided as to how it should disinvest its share. Finance Minister Arun Jaitley announced that the Union Cabinet had given its approval for Air India's disinvestment and set up a committee under his charge to work out how this decision would be implemented. 

The committee would decide how much of the central government's share should be disinvested and how that should be done. It will also have to decide whether the airline's real estate should be part of the deal.

Meanwhile, Civil Aviation Minister Ashok Gajapathi Raju suggested last month that the airline with its debt could not be continued to be funded by the government. He had said, "The Maharaja... is now impoverished." The government's think tank had asked Raju to find a private buyer write off 50 per cent of the airline's liabilities and transfer the remaining liability to the owner.

The new owner will also be offered the rights to commercially develop prime real estate and user rights for a certain period of time.

Niti Ayog chairman, Arvind Panagariya, however, is of a different opinion and said that nobody might really want to buy the airline unless the government wrote off the debt.

Meanwhile, Air India employees have threatened to launch protests if the government plans to sell off the airline. This, however, isn't the first time that the government had proposed to sell off the airline but others had backed off much before the proposal was placed in the Cabinet.