Thursday, March 19, 2020

Covid-19 to hit Air India sale plan: Report

While the aviation sector the world over is facing headwinds caused by the tightening grip of coronavirus, it has also impacted the Indian government’s efforts to privatize national carrier Air India.

It has already extended the date of submission for expression of interest to April 30 from March 17 due to the ongoing coronavirus outbreak.

Consultancy firm Centre for Pacific Aviation (CAPA), in its report titled Impact of COVID-19 on Indian Aviation, said India’s plan to sell off Air India will be further delayed. It will have to infuse “immediate” interim funding of US$300-400 million to ensure continuity of operations until the sale process is done.
CAPA also stated that the government must also have a fall-back plan to regroup and continue to operate the airline for the medium-term if the privatization process is unable to proceed.

In January, the Indian government restarted the divestment process of the carrier and invited bids for its 100% stake in both Air India and its low-cost international budget arm Air India Express, besides its entire 50% holding in ground-handling joint venture AI-SATS.
It also offered incentives such as a restructuring of debt and liabilities and allowing the new owner to offer a voluntary retirement scheme to employees. According to the new plan, the government will pay Air India’s dues to vendors such as airports and oil companies, amounting to 220 billion rupees, or $3 billion, before selling the airline.
19/03/20 KS Kumar/Asia Times
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