Air India privatisation plan shelved

Air India privatisation plan shelved

News:

1. The central government has decided to postpone the plan to disinvestment of Air India.

Important Facts:

2. The central government has decided to privatize Air India by inviting a bid process in March 2018.
3. The government had offered to sell:

• 76% of its stake in Air India
• 50 % of share of low-cost subsidiary Air India Express in ground-handling arm AISATS as a single entity.

4. The government has delayed the disinvestment process due to:

• The rising fuel prices
• The government has not received any bids.

5. Issues:

• Huge Debt and liabilities which accounts for approx. 33,000 crore
• The government continuation with ownership.
• Lack of clear road map.
• Obligation and benefits issue related to permanent and contractual employee.

6. Plan of action to revive of Air India include:

• Improving Efficiencies by bringing private people to work with the airline
• Cutting down costs.
• Monetisation of Air India assets.

7. Conclusion

• The focus should be restructuring of airline under a special administration to overcome the losses.