Govt should exit Air India, says report

The government should sell its entire stake in Air India as any level of equity retention would raise concerns about the prospect of government interference after privatisation, a report said.

It also said that foreign airlines should be allowed to bid for the stake in the loss-making national carrier.

In a brief report, aviation think tank CAPA India also said that cleaning up the airline’s balance sheet would be the most important step.

To revive Air India, which has been in the red for long, the government has decided to go for its strategic disinvestment and the modalities are being worked out by a group of ministers.

The national carrier has a debt burden of more than Rs 50,000 crore.

“The government should exit Air India completely. Any level of equity retention will deter investors due to concerns about the prospect of continued government interference post privatisation,” CAPA India said.

According to the report, the core divestment should consist of the airline operations only — Air India, Air India Express and optionally Air India regional.

These operations should be sold along with aircraft- related debt and reasonable working capital loans, it added.

Air India Express is the low cost international arm of the flagship airline.


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