The government is expected to take some action on privatising state-owned airline Air India in the next six months, a top official told a private news channel on Thursday.
The comment from Niti Aayog Deputy Chairman Arvind Panagariya comes amid reports that salt-to-software conglomerate Tata Group has shown an interest in buying a majority stake in the loss-making flag carrier.
“Something should be happening this year,” Panagariya said in response to a question on timeline for Air India’s privatisation.
The Narendra Modi government has been exploring ways to privatise Air India, which was bailed out in 2012 with $5.8 billion of federal funding. On Wednesday, there was wide speculation that Tata Group has evinced interest in buying majority stakes in Air India.
A TV news channel has reported that Tata Group, in partnership with Singapore Airlines, could be looking at buying the flag carrier. The report said that Tata Sons Chairman N Chandrasekaran had held informal talks with the government, expressing preliminary interest in buying a controlling stake in Air India with 51% equity.
It must be noted that Air India was initially owned by Tata Group, before it was nationalised in 1953. At present, Tata Group has stakes in full-service Vistara, joint venture with Singapore Airlines, and low-cost carrier AirAsia India, its low-cost joint venture with AirAsia Bhd.
Officials had earlier said that the Union Cabinet would take a call on Niti Aayog’s suggestion to privatise Air India. Civil Aviation Minister Ashok Gajapathi Raju had said all options, including disinvestment, is before the government to take the national carrier Air India to a new high.
The talks come against the backdrop of arguments that there is no point in the government pumping in money into Air India as part of its Turn Around Plan and Financial Restructuring Plan (TAP-FRP). Under the TAP-FRP approved in April 2012, the government had committed to infuse equity of Rs 42,182 crore from 2011-12 to 2031-32.
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