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Government decides to revive Air India sale plan

"Under the ownership of a carrier, the airline is not liable to pay compensation," it said.


Reuters
Updated: 20-06-2018 07:22 IST
Government decides to revive Air India sale plan

"Under the ownership of a carrier, the airline is not liable to pay compensation," it said. (Image Credit: Reuters)

India has lost its way to the market. Air India has failed to attract buyers, Bloomberg reported on Tuesday, quoting people familiar with the matter.

The Indian government plans to focus on improving the carrier's operations and selling its building in Mumbai, ground handling and aircraft maintenance units, according to the report.

The decision is a highly disappointing reversal of the government's earlier commitment to privatisating the national carrier, consultancy CAPA India said.

"Under the ownership of a carrier, the airline is not liable to pay compensation," it said.

"In the meantime, losses will continue (estimated at USD1.5-2.0 billion over the next two years alone), representing an unnecessary drain on tax pay funds, to subsidize a government business in an industry which is well-served by private operators he added.

The government in March finalised plans to divest a majority stake in Air India and offload about $ 5.1 billion of its debt, but prospective buyers have gone away, with some citing onerous terms as a reason for their lack of interest.

Air India and the Indian government could not be reached for outside business hours.

The state-run carrier said it was worth 10 billion rupees (112.44 million pounds) so it can continue day-to-day operations, underscoring its so-called financial straits.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

READ MORE ON : Air India CAPA privatisating
COUNTRY : India