Air India needs to spruce up through a fresh cash injection, cost cuts and non-core asset sales, analysts said on Wednesday, after the government indicated a sale of the ailing state-owned carrier had likely been shelved.
Civil Aviation Minister Suresh Prabhu said on Tuesday the government will review its plans to privatise Air India at a later date because now was not the right time to sell as oil prices were high, according to newspaper Mint.
India last month failed to attract buyers for the government's 76 percent stake in the debt-laden carrier, in a blow to Prime Minister Narendra Modi's credentials as a reformer willing to step away from running money-losing businesses.
Shelving the sale could exacerbate the carrier's financial woes and hurt the government's efforts to cut debt, analysts said, adding that then the focus, at the very least, should be on improving Air India's operations to ensure it does not lose more money or market share.
"Government would probably wait for the right market conditions to proceed with the stake sale and probably in the meantime, they could look at offloading some of the non-core assets," said Teresa John, economist at Nirmal Bang Institutional Equities, adding she does not expect the sale to happen before India's general elections next year.
20/06/18 Reuters/Economic Times
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Civil Aviation Minister Suresh Prabhu said on Tuesday the government will review its plans to privatise Air India at a later date because now was not the right time to sell as oil prices were high, according to newspaper Mint.
India last month failed to attract buyers for the government's 76 percent stake in the debt-laden carrier, in a blow to Prime Minister Narendra Modi's credentials as a reformer willing to step away from running money-losing businesses.
Shelving the sale could exacerbate the carrier's financial woes and hurt the government's efforts to cut debt, analysts said, adding that then the focus, at the very least, should be on improving Air India's operations to ensure it does not lose more money or market share.
"Government would probably wait for the right market conditions to proceed with the stake sale and probably in the meantime, they could look at offloading some of the non-core assets," said Teresa John, economist at Nirmal Bang Institutional Equities, adding she does not expect the sale to happen before India's general elections next year.
20/06/18 Reuters/Economic Times
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