Montek bats for privatisation of Air India

Nowhere in the world do developed countries run their flag carriers any longer, says Planning Commission deputy chairman

GN Bureau | October 21, 2013



After civil aviation minister Ajit Singh, planning commission deputy chairman Montek Singh Ahluwalia has also backed the idea of privatising Air India.

He said AI is a good case for privatisation, as no developed county runs its flag carriers any longer, says a report in Business Standard.

Economically too, the government carrier makes a full case for privatisation, as it has been running into losses for long and its real assets are only its routes, he said.

Ahluwalia’s comments assume significance because of a debate on the issue due to AI’s mounting losses.

Recently the aviation minister, who talked of AI privatisation, withdrew his statement following opposition from some quarters.

The airline has about Rs 45,000 crore debt. This comprises debt for aircraft buying, loans from banks and others. However, it undertook a series of cost cutting measures and an aggressive marketing strategy after registering huge losses for years. This resulted generating a cash surplus of Rs 460 crore in the April-June quarter.

A feeble attempt was made to privatise Air India in 2000-01. Hindujas and Tata-Singapore Airlines were interested in the stake. While the former showed interest in both the carriers, the latter was interested in Air India. Both the national airlines were later merged.

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