New Delhi: The Cabinet on Wednesday cleared disinvestment of beleaguered national airline, Air India which has floundered amid stiff competition from no-frills rivals and reported at least seven years of losses.
Announcing the decision, Finance Minister Arun Jaitley said an in-principal approval for divestment of Air India has been taken, but did not say if it will be an outright sale or partial divestment.
“The Cabinet Committee on Economic Affairs, chaired by PM Narendra Modi, has given its approval to fourth tranche recommendations of NITI Aayog on strategic disinvestment of CPSE (strategic disinvestment of Air India and five of its subsidiaries) based on the recommendations of Core Group of Secretaries on Disinvestment (CGD),” he said.
The airline, which was afloat thanks to a Rs 30,231 crore nine-year bailout programme approved in 2012, has about Rs 52,000 crore of debt.
Air India, which made an operating profit of about Rs 100 crore in 2015-16 on back of drop in oil prices, but posted a net loss of Rs 3,840 crore, has seen its market share shrink to 12.9 per cent from 35 per cent a decade back.
Asked about how soon the decision on Air India could come from the Group of Ministers, Jaitley said “in this government process is very fast”.
“All the aspect would be decided by the group. Prime Minister Narendra Modi would constitute the group,” Jaitley said.