NIFTY 50

Privatisation only option for Air India's survival: Government in Parliament

Updated : November 27, 2019 08:28:44 IST

As Narendra Modi government is planning to invite preliminary bids for 100 percent stake sale in Air India for the second time, union civil aviation minister Hardeep Singh Puri on Wednesday said the national carrier is staring at shut down if not privatised early.

The airline is sitting on a debt pile of around Rs 58,000 crore, besides huge accumulated losses running into thousands of crores.

“… 25 percent of salaries of different people were withheld when Air India had financial difficulties and there is full intention that before privatisation, this 25 percent will also be reimbursed to all employees in all segments. We are committed to securing a profitable deal for all,” Minister of State (Independent Charge) in civil aviation ministry Hardeep Singh Puri told Rajya Sabha today.

In a separate reply to Rajya Sabha, the ministry also clarified that the salary of Air India employees has been paid up to October and a provision of Rs 1,331.91 crore has been made in the accounts of the company as on Mar 31, 2019 for pending payment towards implementation of Justice Dharamadhikari recommendations for implementing the revised basic pay of employees.

As of November 1, Air India had 9,428 permanent employees and contractual staff strength stood at 4,201.

The ministerial panel called Air India Specific Alternative Mechanism, under the chairmanship of Home Minister Amit Shah, has approved the re-initiation of process of strategic divestment of Air India and its subsidiaries with 100 percent sale of government of India stake in Air India along with Air India Express and Air India’s stake in AISATS, Puri said today in a written reply to the Upper House.

AISATS or Air India SATS Airport Services Private Limited is a joint venture between Air India and Singapore-based SATS which provides gateway and cargo services at airports.

Any further financial support in a mature and competitive aviation market would not be the best use of scarce financial resources of the government. Air India would have a status at par with other designated carriers of India, post-divestment, Puri added in a written reply to Rajya Sabha.
cnbc two logos
To keep watching CNBC-TV18, India's No. 1 English Business News Channel, call your Cable or DTH Operator and subscribe now for just Rs. 4 per month. You can also subscribe to CNBC-TV18 Prime HD for Re 1/- per month.Find out more
Live TV

recommended for you