Centre likely to put 100% of Air India stake on sale soon
AIR INDIA IS IN THE GRIP OF A MAJOR FINANCIAL CRUNCH AND INDIAN OIL STOPPED FUEL SUPPLY TO THE AIRLINE AT SIX MAJOR AIRPORTS
NEW DELHI: It can’t get fuel in six airports — supply has been stopped on account of payment issues — and has no money to pay salaries beyond October, making a ministerial group’s meeting next week to decide on the next steps in privatising it, all the more important for Air India.
Reconstituted after the NDA returned to power in May, the group of ministers (GOM) is likely to meet next week to decide on the modalities of sale of the state-owned airline. The government is likely to go for 100% sale this time, people in the civil aviation ministry said.
“Before the first meeting of GOM, we will have an internal meeting on Air India and once the first meeting is done, the process related to sale will begin,” Hardmanaging eep Puri, the civil aviation minister, had said on August 16.
Air India is in the grip of a major financial crunch and on Thursday, Indian Oil Corp stopped fuel supply to the airline at Ranchi, Mohali, Patna, Vizag, Pune and Cochin airports, owing to non payment of dues.
While flights of Alliance Air, a subsidiary of Air India were affected, the airline itself managed by carrying extra fuel while operating to these destinations.
According to the people, Ashwnai Lohani, chairman and director of Air India, has already intimated the ministry about the funds crunch.
Air India needs ~300 crore per month for salaries and doesn’t have the money to pay salaries beyond October.
The GOM comprises home minister Amit Shah, finance minister Nirmala Sitharaman, commerce and railway minister Piyush Goyal and civil aviation minister Hardeep Singh Puri.
The panel, named Air India Specific Alternative Mechanism (AISAM), is likely to meet next week following which a Request for Proposal (RFP) will be issued.
“Our financial performance this fiscal has been very good and we are moving towards a healthy operating profit. The airline, despite its legacy issues, is performing very well,” Dhananjay Kumar, the spokesperson of Air India, said on Thursday.