Choice Between Disinvestment & Shutting Down, Puri on Air India

Air India has an accumulated debt of Rs 60,000 crore.

Union Civil Aviation Minister Hardeep Singh Puri on Thursday said that bidding for Air India would be done on the basis of its enterprise value instead of equity value.

(Photo: PTI)

Air India will be “100 percent disinvested” and it “must find a new home”, Civil Aviation Minister Hardeep Singh Puri said on Saturday, 27 March. Speaking on the disinvestment process of the debt-ridden national carrier, he said prospective buyers have been given 64 days to place their bids.

“We’ve decided that Air India will be 100 percent disinvested. The choice isn’t between disinvestment and non-disinvestment. It’s between disinvestment and closing down. Air India is a first-rate asset, but has an accumulated debt of Rs 60,000 crore. We need to draw the slate clean.”

Hardeep Singh Puri, Civil Aviation Minister

Multiple entities had last month expressed interest in bidding for the government's stake in the airline.

In the Budget last month, the government allocated Rs 2,268 crore for a special purpose vehicle set up as part of the financial restructuring of Air India. Finance Minister Nirmala Sitharaman had said the disinvestment of Air India and Pawan Hans would be completed by the next financial year.

In 2018, the government had floated an Expression of Interest (EoI) for Air India to offload 76 percent stake and management control in the airline, but it did not get a single bidder. The government currently owns 100 percent equity of Air India.

“In a meeting on 22 March, it had been decided that the shortlisted bidders (for Air India disinvestment) will be informed that the bids have to come within 64 days. This time the government is determined and there is no hesitation.”

Hardeep Singh Puri, Civil Aviation Minister

The new owner will be taking over 121 aircraft in Air India’s fleet and 25 planes in the Air India Express fleet. These exclude the four Boeing 747-400 jumbo jet aircraft that the airline plans to transfer to its subsidiary Alliance Air, which is not a part of the current transaction offer.

However, the properties currently in use by Air India, including the Nariman Point building and the company’s headquarters near Connaught Place in New Delhi, will be retained by the government.