The Union Cabinet will soon decide the fate of the state-owned carrier Air India by deliberating on three options to divest the government’s majority stake and consider the creation of a special purpose vehicle (SPV) to get rid of a major portion of its more than ₹50,000-crore debt.
The Civil Aviation Ministry is already looking into the recommendations made by NITI Aayog for the national carrier’s revival.
The three options on the table are a full 100% sell-off, a 74% stake sale or retaining a 49% share in the airline, as per the note prepared by the Department of Investment and Public Asset Management (DIPAM) for the Cabinet’s consideration, officials aware of the development said.
While the exact contours of proposed privatisation could not be immediately ascertained, the possibility of strategic stake sale as well as outright disinvestments are being considered.
Since the merger of Indian Airlines with itself, Air India has been in the red. However, it posted an operational profit of Rs 105 crore on account of low fuel prices and increased passenger numbers in 2015-16.
On Tuesday, the Civil Aviation Ministry said all possible alternatives are being considered to make Air India viable, even as it asserted that the clock cannot be put back on the Indian Airlines merger.
Minister of State for Civil Aviation Jayant Sinha had said whatever that would be done for Air India will be in national interest.
“We are considering all possible alternatives (for Air India)… We are discussing (what can be) the winning strategy for the airline,” he had said.