In what could make Air India sale an uphill task for the government, the national carrier could report highest-ever loss of over Rs 7,600 crore in financial year 2018-19 on account of low fleet utilisation and high fuel prices among others.<\/p>\n\n\n\n
An official source said the total revenue in the previous fiscal stood close to Rs 26,000 crore.The government had last year set the ball rolling for Air India’s disinvestment offering 76 per cent equity stake to private parties but the plan proved to be a damp squib not a single investor turned up to submit expression of interest . This forced the government to put off the sale process.<\/p>\n\n\n\n
It maintained that the plan would be taken up once the operating environment in the aviation sector improved. Impending general election was another reason for putting the plan on hold.<\/p>\n\n\n\n
The airline has gone into losses ever since its merger with Indian Airlines in 2007. The massive fleet order cleared by the UPA government continues to weigh on its books.<\/p>\n\n\n\n
“In the first two months of the fiscal we have seen 20-25 per cent increase in our sales. If restriction from Pakistani airspace is withdrawn, we can still make operating profit,” he said.The airline’s financial has shown signs of improvement following suspension of Jet Airways flights in April.<\/p>\n\n\n\n
As the Modi government has returned with a thumping majority, it is now keen to complete its unfinished agenda from the previous term.<\/p>\n\n\n\n
In order to sweeten the deal for Air India this time, the government is likely to offer entire 100 per cent stake in the airline and consider transaction advisor EY’s suggestion to transfer more debt to a special purpose vehicle .<\/p>\n\n\n\n
The previous Modi government had decided to transfer debt amounting Rs 29,464 crore along with other non-core assets to the newly-created SPV to attract bidder interest for the carrier.<\/p>\n\n\n\n
As total debt of the airline has since gone up to about Rs 58,000 crore, the transaction advisor has suggested shifting more debt to the SPV so that private parties’ liabilities come down.<\/p>\n\n\n\n
“When bankers are finding it tough to get a buyer for Jet Airways, it will certainly be very difficult to convince investors to take over Air India.<\/p>\n","protected":false},"excerpt":{"rendered":"
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