New Delhi: In the first week of its taking charge, the new government has shown it is serious about divesting its stake in the state-owned Air India.
On Monday, the government announced the setting up of a data room which will be up and running by July 1 and the appointment of two nodal officers from key departments to liaise with those dealing with the data room. The data room will provide a compilation of all data pertaining to Air India’s operational and financial aspects. This will form the basis for the valuation of the airline in its present form. Setting up the data room should be an easy first step as accounts for 2018-19 have to be incorporated. Accounts till 2017-18 were updated and stored during the divestment process under the previous Modi government.
With the data room becoming operational from July, the government will have enough time to go through the process without any pressure of hurrying through. This time it is hoped that the process will be completed within 3 to 12 months.
Among the various aspects that may work in favour of Air India’s divestment are the Special Purpose Vehicle which was created to park the Maharaja’s debt of over ?29,000 crore. This means any potential investor in the airline will only have to pick up aircraft related and other sundry debt.
In addition, global oil prices are not very high and the rupee seems to have stabilised at about ?69.25 to a dollar.
Then there are other advantages. Air India is the only Indian carrier operating non-stop services between India and San Francisco. Plans are afoot to start services to Bali and points in Africa. Air India will be the only international airline operating on these routes from and to India.
04/06/19 Ashwini Phadnis/Business Line
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On Monday, the government announced the setting up of a data room which will be up and running by July 1 and the appointment of two nodal officers from key departments to liaise with those dealing with the data room. The data room will provide a compilation of all data pertaining to Air India’s operational and financial aspects. This will form the basis for the valuation of the airline in its present form. Setting up the data room should be an easy first step as accounts for 2018-19 have to be incorporated. Accounts till 2017-18 were updated and stored during the divestment process under the previous Modi government.
With the data room becoming operational from July, the government will have enough time to go through the process without any pressure of hurrying through. This time it is hoped that the process will be completed within 3 to 12 months.
Among the various aspects that may work in favour of Air India’s divestment are the Special Purpose Vehicle which was created to park the Maharaja’s debt of over ?29,000 crore. This means any potential investor in the airline will only have to pick up aircraft related and other sundry debt.
In addition, global oil prices are not very high and the rupee seems to have stabilised at about ?69.25 to a dollar.
Then there are other advantages. Air India is the only Indian carrier operating non-stop services between India and San Francisco. Plans are afoot to start services to Bali and points in Africa. Air India will be the only international airline operating on these routes from and to India.
04/06/19 Ashwini Phadnis/Business Line
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