The aviation minister, Hardeep Singh Puri today said in Lok Sabha that the government is committed to strategic disinvestment of Air India as the debt burden on the carrier is unsustainable.
At the same time, he added that since the Jet Airways stopped operating, Air India has become “attractive acquisition.”
Puri also said it is not only Air India which is suffering losses. Most of the airlines are suffering on the account of high cost of Air Turbine Fuel (ATF) which constitutes a large share of operating expenses of the airlines.
“The airports are doing very well but the airlines which are running the operations are all operating on very thin margins because they have a very high capital cost and they have a lot of uncertainty due to variables which I have just mentioned. For instance, the closure of Pakistani airspace has resulted in Air India cumulatively taking a loss of something like Rs. 430 crore,” said Puri.
He said the previous attempt to disinvest the carrier could not succeed. But now the government has learnt lessons and mechanism will ensure the move this time.
Puri said that all the seven verticals of the national carrier is making profits. He said that the airline has immovable assets worth Rs 7000 crore. Also he said that among other movable assets, Air India has a large art collection which is also valuable.
However, Manish Tewari, Congress, wanted to know why the government was disinvesting Air India when it was dong well. Puri said the debt burden of the airline was a major reason the government wanted to disinvest it.