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Monday 9 December 2019
Economy Business Puri: Air India disinvestment a commitment of govt

Puri: Air India disinvestment a commitment of govt

Puri said there has been a steady improvement in finances of Air India and the airline is set to make a profit during the current financial year

New Delhi: The government is committed to the disinvestment of national carrier Air India and the plan is to make it more operationally viable before disinvesting it, Civil Aviation Minister Hardeep Singh Puri told the Rajya Sabha Wednesday.

Replying to supplementary questions during the Question Hour, Puri said there had been a steady improvement in finances of Air India and the airline was set to make a profit during the current financial year.

Hardeep Singh Puri said Air India was currently making a revenue of Rs 15 crore every day.

“Our plan is to revive Air India, make it more operationally viable and then to disinvent it. So far as Air India is concerned, the government is committed to the privatisation of Air India. Let there be no ambiguity on that,” Puri said.

Puri said the costing and overall calculations of an Airline depended on a large number of factors, including external factors like the closure of Pakistan air space, but should end the current year in profit after which it will be disinvested.

“There has been a steady improvement in Air India’s finances. It has been my expectations that in the current financial year, we are hoping to make a profit. But, the year that has concluded the figure shall show a loss,” Puri said.

The minister said, in April, the airline had improved but there are certain external factors, like the closure of airspace of Pakistan, that have affected its profitability.

“Our expectations is that in the coming months, in the current year, we will make a profit and turn Air India around and then privatise the airline,” Puri said.

“It is customary for situations like this for employees and stakeholders in the process to put pressure on the government. We have increased the Air India profitability by 7 crore revenue per day. We are doing all that we can,” Hardeep Singh Puri said.

The Civil Aviation minister also rejected as “motivated” certain news reports that the airline did not have enough finances and was unable to pay up salaries up to this October.

Puri said there was an overall debt of Rs 59,000 crore and there was a proposal to retire Rs 29,000 crore into a special purpose vehicle when an attempt was made to privatise Air India. “Now when Air India’s alternative mechanism is established, we will take a view on these. After all, Air India is a viable airline and it has some prized assets and when we go for disinvestment, we will also take care of this. But, the press report was motivated in order to put pressure on the government not to disinvest in Air India,” he noted.

Air India by itself and many of its operational assets are very prized assets and the Nariman headquarters are a case in point, Puri said.

Responding to another query on rising airfares, the minister said the disruption or the uncertainty caused on account the cessation of operation of Jet Airways in so far as the domestic air travel was concerned had been almost completely corrected.

“Insofar as the international airfares are concerned, we have for a three-month period allocated the slots to other domestic carriers. Insofar as the domestic sectors are concerned, airfares on the trunk sectors like Delhi-Mumbai which is on an average Rs 5,100 has not increased over a 20 year period. That was the fare in 2001, that was the fare in 2011 and now,” Puri said.

As far as international sector is concerned, the minister said because Jet Airways used wide-bodied aircraft and some of the others did not possess wide-bodied aircraft which they were in the process of acquiring and for three-month period slots of Jet had been given to them and the resolution process on Jet Airways proceeds had to be seen.

Air India is incurring losses, but those losses are being incurred not because it is not a prized asset, it has some excellent assets and has a fleet of aircraft which travels to 80 destinations domestically and 40 internationally, Puri noted.

“But, it has over a period of time undertaken debt and that debt servicing is becoming unsustainable. We are incurring losses of Rs 15 crore a day and therefore Air India would have to be disinvested,” Puri said.

Air India, the minister said, had a shortage of 20 aircraft on account of certain cost-cutting measures which were undertaken. “We are hoping to bring these 20 aircraft back into operation by October, at least 17 of them,” he added.

Air India has also been given many of the slots vacated by Jet Airways domestically and also for its low-cost carriers like Air India Express and Alliance Air, he added.

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