New Delhi: The government on Wednesday maintained that it was committed to privatisation of national carrier Air India but top government sources later said the government had pressed the “pause” button as current market conditions were not favourable due to high global prices of crude oil leading to financial stress in the global market. Aviation Turbine Fuel (ATF) accounts for about 45 percent of the operating cost of airlines that were seen as prime potential bidders for Air India. Sources also said the Government was doing all it can to ensure the national carrier runs efficiently. The national carrier is also expected to revamp its business class on flights very soon to attract more business class passengers on its long-haul international flights. “The government is committed to strategic disinvestment, ... that the Government has made very clear,” minister of state for civil aviation Jayant Sinha told reporters on Wednesday at a press conference called by the ministry on completion of four years of the Modi Government in office and the initiatives taken in the aviation sector. Asked about the exact status of the privatisation process now, top government sources later said, “We will pause till market conditions become favourable.”
This follows the shock to the Government and the huge setback to the privatisation process for Air India wherein no initial bids were received from bidders for acquisition of stake in Air India on May 31 when the deadline expired for submission of EoIs.
The Government had offered sale of 76 percent stake in the national carrier through issue of a Preliminary Information Memorandum issued in March this year but the process failed.
Mr. Sinha said, “We ran a disinvestment process ... nobody expressed any interest during that process. ... It’s clear that process right now is over. So we have to move forward and consider other alternatives which is what we are considering. Now, as market conditions, as industry circumstances change.”
