Government put on hold the sale of Air India – instead, provide funds to improve operations.

The Indian Government has shelved the potential sale of the national carrier, Air India as it failed to find bidders for 76# stake in the debt-laden carrier.

The Ministry of Civil Aviation says, that government will review its plans to privatise Air India at a later date, and instead, inject emergency funding to revive the airline and cut cost to reach profitability.

“The airline is posting operational profits. None of the flights go empty. With all the cost-efficient mechanism in place, we will continue improving its operational efficiency. There is no need to rush in for disinvestment as of now,” the official told PTI.

According to CAPA, more the airline wait to sell, it will lose out in its value and estimated the carrier would make losses of $1.5 billion to $2 billion over the next two years alone, which will unnecessarily drain taxpayer funds.

Air India has been losing domestic market share to rapidly expanding lower-cost operators like InterGlobe Aviation, IndiGo and SpiceJet that are now looking to expand their international routes.

Air India, which employs some 27,000 staff, was seeking a short-term loan of 10 billion rupees ($148 million) so it can continue day-to-day operations.


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