Sunday, August 02, 2020

Government widens scope of Air India’s sale

New Delhi: The scope for the sale of the debt-ridden national carrier Air India has been widened with the Union government’s recent notification of allowing 100% Foreign Direct Investment (FDI) by NRIs into Air India.
The Ministry of Finance and the Ministry of Civil Aviation had together brought in this amendment in the FDI policy earlier this week with a hope that this would fast-track the sale of Air India. Sources in the Ministry of Civil Aviation said that they had been pushing hard for getting this amendment passed as they believed that this would help the national carrier find some buyers as repeated attempts to sell the airlines have remained futile over the past two years.

Officials in the Ministry of Civil Aviation that this correspondent spoke to also hinted that there were some buyers who were expressing their interest, but were not eligible due to the existing rules for buying stakes in an Indian airline.

“The government allowing 100% FDI in Air India certainly does not mean that this airline can be brought out by any foreign national or for that matter any foreign company. The 51% stake of the airlines will still remain with an Indian national which is why the rule has been amended to bring only NRIs,” a Ministry of Civil Aviation official told this correspondent.

According to the earlier norm, NRIs could own only up to 49% stake of the national carrier’s stake while the rest had to be owned by an Indian residing in India.
However, aviation experts believe that the exercise to sell Air India at a time when the global aviation industry is facing one of its biggest crisis will still remain futile as no individual or company would like to invest in an airline at this time which is already debt-ridden.
02/08/20 Dibyendu Mondal/Sunday Guardian Live

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