Do or die: Air India will have to cease operations if not privatized, says minister

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Do or die: Air India will have to cease operations if not privatized, says minister

India’s debt-crippled national carrier Air India will have to shut down if a new attempt to sell the troubled airline fails to find a buyer, the country’s Aviation Minister Hardeep Singh Puri announced.

“Once we invite bids, then we’ll see how many bids will come in,” he told Parliament.

A group of officials is currently finalizing the process of inviting bids from the private sector. Last year, the government failed to attract any bidders when it tried to sell a 76 percent stake in the airline and offload about $5.1 billion in debt. Air India is saddled with an $11 billion overall debt.

According to Puri, the government is now re-evaluating some of the terms and is open to selling the airline in its entirety. One of the biggest hurdles, he said, is its large number of employees.

Air India has about 9,400 permanent staff and 4,200 contract workers.The minister said the government is committed to securing a deal that is favorable for the employees.

The carrier has struggled to pay salaries and buy fuel, with losses mounting following earlier privatization attempts. Air India spokesman Dhananjay Kumar said that the company is unable to pay its debts and its outlook is gloomy.


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“We are concentrating on day-to-day operations and not focusing on the future,” he said, adding “Whatever resources we have, we are trying to use them in an optimum manner and trying to run our flights.”

Air India, which started as Tata Airlines in 1932 and later became state-owned, has been losing money for more than a decade. The company, which was once known as the ‘Maharaja of the skies’, has lost market share to low-cost rivals in one of the world’s fastest-growing but most competitive airline markets.

Author: George Taylor

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