Finally, the day has come for the state-owned airlines Air India, which has been suffering deep losses awaiting a quick bailout.
The Central Government on January 07, 2020 approved a draft proposal for inviting bids for the sale of stake in national carrier.
In a special meeting of senior government officials including the Amit Shah-led committee also approved all the proposals for debt transfer from Air India to the Special Purpose Vehicle (SPV).
However, the deadline for the stake sale is yet to be finalized and the government looks flexible on this aspect.
Air India Trims Losses in FY18
Till date, INR 29,400 crore debt has been transferred. Now, the new proposals call for transfer of another INR 60,000 crore to SPV.
As the reports say, the national carrier is currently making around INR 26 crore loss a day and has accounted for INR 69,575 core in the last one decade.
For the FY 2018-19, Air India’s net loss was provisionally calculated as INR 8,556.35 crore. The Government of India owns 100% stake in the national carrier.
Air India (5 Year Report Card: 2014-2019)
Despite these many losses, experts believe there exists a lot of potential in Air India once it goes into the hands of private players.
“Ensuring that the entire fleet is operational will significantly improve the airline’s financial performance and will make Air India a more attractive proposition for bidders, increasing the likelihood of a successful outcome. The Government would need to commit $300 million to $400 million to get all of the grounded aircraft back in the air,” says CAPA India, an aviation research firm.