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Air India’s “books are so bad” that nobody will buy it, even if the government wanted to sell off the national carrier, Civil Aviation Minister Ashok Gajapathi Raju said on Thursday.
Ruling out disinvestment in the carrier that has a debt of Rs 50,000 crore, Raju at the same time said the taxpayers’ money could not be committed “for eternity”.
“Its (Air India) books are so bad. I don’t think that even if it is offered, anybody would come for it,” he said.
Grappling with mounting debts and tough business conditions, Air India has been in the red since the merger of then Air India and Indian Airlines in 2007 and is staying afloat on a Rs 30,000-crore bailout package extended by the erstwhile government.
Asserting that unlike others, he would not like to get into “Air India bashing”, the Minister also said that the carrier needs to function in a more cohesive manner to deliver on its turnaround goals. “It is a nice airline. I like Air India but I can't commit taxpayers’ money for eternity. That is not done,” Raju told PTI.
Buoyed by a improving financial situation and high growth potential of the domestic aviation market, Air India is putting in plans to expand its fleet by another 100 aircraft in the next four years.
“The cohesiveness of the team has to increase and where they have worked as a team, they have delivered, and where they have not worked as a team, they have pulled in different sides. Nobody can put the clock back. The quicker they realise it, the better,” said Raju.
While there has been no official announcement, the airline has managed to eke out an operational profit of Rs 6-8 crore in the previous financial year. “The fact that they have not made an operating loss speaks volumes,” Raju said.
Confident that the airline has the capability of flying high, he said it wasworking in that direction and in a reference to criticisms, emphasised that he does not like the idea of Air India “bashing”.
According to latest Directorate General of Civil Aviation data, Air India ferried a total of 1,198,000 passengers on its domestic network in April, cornering a market share of 15.1 per cent during this period.
“Let’s wish and hope that it (Air India) flies high. I am not against the public sector and I am not for only public sector at all costs. Public sector has a role and private sector has a role. Let them work in competition,” Raju said.
Civil Aviation Secretary R N Choubey said, “Air India plans to expand its fleet from 130 aircraft to 230 aircraft in the next four years.... The airline now expects to see net profit in 2018-19 financial year, two years ahead of the timeline fixed in the turnaround plan.”
The carrier is surviving on a Rs 30,000-crore bailout package, spread across ten years, announced by the UPA government in 2012 and the funds are being provided subject to the airline achieving certain operational parameters. So far, more than Rs 22,000 crore has been provided under the turnaround plan.
This equity infusion includes the financial support towards repayment of principal as well as interest on government-guaranteed loans taken for aircraft acquisition and the annual interest outgo against these loans itself stands at a whopping Rs 4,000 crore.
Government has allocated Rs 1,713 crore to the airline as part of this bailout package for the current financial year against the carrier's request for Rs 3,901.49 crore.
Apart from an estimated operational profit of Rs 6-8 crore, the government-run carrier's total loss is projected to have gone down by almost 60% to Rs 2,636 crore in the financial year ended March 2016. In 2014-15, it had a loss of Rs 5,859.91 crore.
