Air India Privatisation Process Might Not Happen Soon

The delayed process of sale Air India’s stake might be beneficial for potential buyers as the overall economic shutdown would affect their credibility.

By January 16th, 2020 AT 8:01 PM
Highlights
  • Air India’s sale might get delayed for the second time
  • The delayed process will be beneficial for potential buyers
  • Air India has a total debt of more than Rs 60,000 crores

Despite the continuous efforts, sale of Air India might get an undue bustle again. The government have been planning to privatise the shares of the famous carrier as it has been in debt for a long time. The process of sale started early back in 2018 when the airline has a debt of Rs 60,000 crores, but due to unavoidable reason, the process went down the hill. To finish the process soon, the government has already offered 100 % stake to investors and potential buyers.AirIndia-Sale-Delayed

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Holding Sale Process Might Be Beneficial

As per the words of Mark Martin who’s the founder and CEO of Martin Consulting “As the rupee is depreciating against the dollar and several other factors such as dynamic oil prices and an overall market slowdown, it would be better for the government side to delay the sale process and wait for some time. Martin further added that all the potential buyers would wait without any complaints as the ongoing economic shutdown might give unsatisfied results which would indicate bad aviation investment and decrease their credibility.

Aviation Industry is Rising 

As per the stats of directorate general of civil aviation (DGCA), the aviation industry saw massive growth in 2019. From the first seven months of the previous year, the industry growth rate jumped from 3.5% to 21.8 %. The carrier has been trying all the possible ways to reduce their debt burden. To reduce the debt amount and contribute to the growing industry, Air India introduced a particular purpose vehicle that is Air India Asset Holding (AIAHL) which almost reduced Rs 29,474 crore deb amount. Apart from this AIAHL also generated Rs 7,000 crore through a process of the bond sale earlier in August 2019. As per the words of Bhargava who’s the former executive director of Air India “The government has not been a great marketer so far. They should put forward the strengths of the carrier rather than hiding it”.

Shrijan takes joy in creating, listening and curating tasteful music. He's also an EDM connoisseur and fancies shows with good plotlines. Writing about flights and flying is one of his jams

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