Monday, February 19, 2018

Divestment in air : India, Pakistan clear flagships for sell-off

New Delhi: The Maharaja has company as it will not be the only airline that is being privatised this year.

The ownership of two other state-owned airlines — Pakistan and Vietnam — is also expected to change hands, if everything goes as planned.

Pakistan International Airlines (PIA), whose fate more or less mirrors Air India’s, and Vietnam Airlines are to be sold in 2018. Of course, the Italian carrier Alitalia has been unsuccessful in finding a suitor for a few years now and, hence, is also technically available for sale.

There is a lot in common between Air India and PIA. Both came into being before India achieved independence from the British and before Pakistan was formed. Founded in October 1946 as Orient Airways, the airline was nationalised in 1955 and renamed Pakistan International Airlines.

Both PIA and AI are state-owned and the governments of the two countries want to sell them by June.

The divestment process, however, is different. The Fiscal Policy Statement 2017-18 in Pakistan that the Finance Ministry tabled in the lower house of Pakistan’s Parliament said that the restructuring plan (of PIA) will be followed by divestment of 26 per cent government of Pakistan equity stake to a strategic partner.
18/02/18 Business Line