The government has for now dropped plans to sell majority stake in Air India as it may not be the right time to privatise the loss-making flag carrier in an election year, a top official said today.
Civil Aviation Minister Suresh Prabhu said a decision on the fate of privatisation plan was taken at a meeting yesterday after considering factors like state of global aviation industry and oil prices.
"Yesterday we had a meeting, so we have already decided," Prabhu told reporters here today.
"Because airline industry globally is losing and particularly with increase in oil (prices), the environment is becoming challenging for the airline industry. So we reviewed it and said we will review it later," he said.
The top official involved in the process further said the meeting decided not to pursue the stake sale in Air India in an election year and instead provide enough funds to meet the operational needs of the debt-laden national carrier.
The meeting, chaired by Union Minister Arun Jaitley, had Officiating Finance Minister Piyush Goyal, Prabhu and Transport Minister Nitin Gadkari in attendance.
The move comes within weeks of the Modi government's biggest privatisation move failing to attract even a single bidder.
The official, who wished not to be identified said, "The airline is posting operational profits. None of the flights go empty. With all the cost efficient mechanism in place, we will continue improving its operational efficiency. There is no need to rush in for disinvestment as of now."