TLI Staff
New Delhi: With Coronavirus (Covid-19) pandemic continuing to devastate business and economy and airlines facing survival challenge, the Indian government may have to further delay privatization of national carrier Air India.
Moreover, it will have to infuse an additional Rs 3,000 crore to ensure the airline survives the Corona shock and remains operational at its current capacity.
“The privatisation process for Air India will be further delayed. The submission date for Expressions of Interest has already been pushed back by six weeks. As a result, the government will need to commit significant and immediate interim funding of $300-400 million for the national carrier, to ensure that it is able to operate at least in its current condition until such time as the sale transaction is concluded,” aviation advisory Centre for Asia Pacific Aviation (CAPA) has said.
“The government must also have a fall-back plan to regroup and continue to operate the airline for the medium-term if the privatisation process is unable to proceed,” the Sydney-based firm said.
As the impact of deadly Coronavirus has been deepening, there is growing uncertainty over the future of many Indian carriers which have very weak balance sheet. In absence of strong contenders for Air India, the government may not have any choice but to put the airline sell-off plan on the back seat.
With crisis escalating each passing day, the government has already extended the date for submitting the bids for acquiring 100 per cent stake in national carrier by almost a month and half to April 30, 2020.
“Further changes with respect to the important dates, if any, will be communicated to the interested bidders subsequently,” Department of Investment and Public Asset Management (DIPAM) said in its third corrigendum related to Air India sale.
Giving reasons for extending the bidding deadline, DIPAM had said that the dates have been extended as interested bidders had demanded the same in the wake of Coronavirus spread.
The government on January 27 invited bids from prospective buyers of selling its entire 100 per cent stake in Air India and two of its subsidiaries. Along with Air India and its low-cost subsidiary Air India Express, the airline’s 50 per cent stake in ground-handling joint venture firm AISATS has also been put on the block.
After failing to sell Air India in its previous term, the Modi government is determined to privatize the carrier this time even as the plan faces objection from opposition parties.
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