To the minister of state for civil aviation Jayant Sinha, the lack of bidders for Air India was a “little unfortunate.” But he reiterated that the government “was and is” committed to strategic divestment of the national carrier. On Tata Group’s Vistara, which is facing a delay in getting an approval to fly overseas, Sinha said his ministry is seeking to ascertain that the carrier’s plans are delinked from the process of an investigation. “Policy making is a continuous process ..
While the government implemented many reforms, it has failed to implement the passenger Charter, divest Air India, or allow airlines such as Vistara to fly internationally….
Policy making is a continuous process and it is definitely the art of the possible. We made a very sincere attempt to have Air India go through the process. The offer we had put up was very fair and balanced, where Air India’s debt was reduced in line with the assets it had and the rest was taken over by the government. In the past four years, Air India has gone through an operational turnaround. Of course, what happened was that the industry condition changed with oil prices going up and rupee depreciating and no bidder turned up due to these conditions. Air India getting no bidders was a little unfortunate because the government was and is committed to the strategic divestment of the national carrier.
The other issue, of Vistara not getting the approval to fly overseas, is pretty unique. Is it policy paralysis?
Absolutely not! As you know, we had to work through the fact that there is an investigation on it (the procedure followed to relax 5/20 — foreign flying eligibility norm). We need to make sure that this investigation does not impede the decision to enable it to fly overseas.
As part of the financial package for Air India, the government has decided to take over Rs 29,000 crore of debt. How does the government plan to repay it?
We had decided at the time of strategic divestment itself that a substantial part of Air India’s debt will be taken over by the government and only the debt that matches the asset is transferred to the airline. We are following through on that. This debt transfer is a great benefit to taxpayers too because the borrowing cost for the government is going to be much lower than Air India. So, the tax payer’s money is going to be saved in this regard. The repayment would happen after we start disposing off Air India’s non-core assets, such as real estate and subsidiaries, which include AITSL (New Delhi would sell 100% in the ground handling subsidiary). As we sell these, we will be able to pare down the debt of Rs 29,000 crore.
Will these sales fetch the government that kind of money?
That we will have to see and I cannot predict that. It depends on the valuation and pricing for those transactions.
10/12/18 Mihir Mishra/Economic Times
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While the government implemented many reforms, it has failed to implement the passenger Charter, divest Air India, or allow airlines such as Vistara to fly internationally….
Policy making is a continuous process and it is definitely the art of the possible. We made a very sincere attempt to have Air India go through the process. The offer we had put up was very fair and balanced, where Air India’s debt was reduced in line with the assets it had and the rest was taken over by the government. In the past four years, Air India has gone through an operational turnaround. Of course, what happened was that the industry condition changed with oil prices going up and rupee depreciating and no bidder turned up due to these conditions. Air India getting no bidders was a little unfortunate because the government was and is committed to the strategic divestment of the national carrier.
The other issue, of Vistara not getting the approval to fly overseas, is pretty unique. Is it policy paralysis?
Absolutely not! As you know, we had to work through the fact that there is an investigation on it (the procedure followed to relax 5/20 — foreign flying eligibility norm). We need to make sure that this investigation does not impede the decision to enable it to fly overseas.
As part of the financial package for Air India, the government has decided to take over Rs 29,000 crore of debt. How does the government plan to repay it?
We had decided at the time of strategic divestment itself that a substantial part of Air India’s debt will be taken over by the government and only the debt that matches the asset is transferred to the airline. We are following through on that. This debt transfer is a great benefit to taxpayers too because the borrowing cost for the government is going to be much lower than Air India. So, the tax payer’s money is going to be saved in this regard. The repayment would happen after we start disposing off Air India’s non-core assets, such as real estate and subsidiaries, which include AITSL (New Delhi would sell 100% in the ground handling subsidiary). As we sell these, we will be able to pare down the debt of Rs 29,000 crore.
Will these sales fetch the government that kind of money?
That we will have to see and I cannot predict that. It depends on the valuation and pricing for those transactions.
10/12/18 Mihir Mishra/Economic Times
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