The government is working on finalising a draft preliminary information memorandum for divestment of national carrier Air India and the new Air India Specific Alternative Mechanism is expected to soon hold a meeting to approve the same, sources aware of the development told CNBC-TV18.
As divestment of Air India is part of the 100-day agenda of Modi government, the preliminary information memorandum is expected to be floated next month, said sources. The government is mulling to divest 99-100 percent stake in the debt-ridden carrier, sources added.
As far as the employees are concerned, internal calculations of the airline show that over 90 percent of the employees will be retired around 2021, after which around 1,000-1,500 employees will be with the airline.
The carrier is also looking to activate 19 of its grounded planes by the end of September to add more flights in domestic and international space.
"We are planning to revive two B787s very soon, four B777 by August and 13 A320s by end of September...these will be used in flights to Nairobi, Toronto, Bali and others," a person aware of the development said, adding that an estimated Rs 1,000 crore has been spent on maintenance of these 19 planes, which have been grounded for over a year now.
Referring to the fragile finances of the airline, the government think-tank NITI Aayog had suggested divestment of Air India as part of its recommendations on Strategic Disinvestment of the Central Public Sector Enterprises in May 2017.
"Further financial support in a mature and competitive aviation market would not be the best use of scarce financial resources of the Government," NITI Aayog had said in its report.
Soon after, the Cabinet Committee on Economic Affairs in its meeting held in June 2017 had given in-principle approval for considering strategic disinvestment of Air India and its five subsidiaries. The Cabinet had also constituted an Air India Specific Alternative Mechanism (AISAM) to guide the process on strategic disinvestment from time to time and decide on related issues.
While the government invited bids for 74% stake in the national carrier, it could not get any bids in the preliminary round even after extending the bid deadline twice. The government then had decided to attempt divestment after global economic indicators stabilize.
Now, the new AISAM is yet to hold its first meeting under Modi government's second innings. It is expected to be headed by the new Finance Minister Nirmala Sitharaman and would include Aviation Minister Hardeep Singh Puri among others.
As first reported by CNBC-TV18 last year, the government had decided to transfer debt amounting Rs 29,464 crore along with other non-core assets to the newly-created special purpose vehicle to attract bidder interest for the carrier.
As per the provisional figures of FY 2018-19, the total debt of Air India Ltd as on March 31, 2019, is Rs 58,351.93 crore. While no party has come forward till now to show interest in Air India, IndiGo, the c in Air India, however, only for the international segment.