India failed last year in its attempt to sell a 76% stake in loss-making Air India due to a lack of interest from bidders, but said it would return with an alternative proposal soon.
The Union Government remains committed to the disinvestment of Air India Ltd. And its subsidiaries.
The Union Minister for Civil Aviation informs the Loksabha on 27th June’19 in reply to question asked by INC MP Manish Tiwari that as per the Provisional figures of FY 2018-19, the total debt of Air India Ltd as on 31st March 2019 is Rs.58,351.93 crore.
Air India Ltd. provides domestic and international air transport services, which includes mainly passenger and cargo services and other related services. In addition, Air India has five Subsidiary Companies and one Joint Venture with Singapore Air Transport Services which are operating in various business verticals primarily related to the airlines business.
The Net Profit/Losses of Air India Ltd and its subsidiaries and Joint Venture company for the past three years are as follows (in Rs. Crores):
| Year | Air India | Airline Allied Services Ltd. | Air India Air Transport Services Ltd. | Hotel Corporation of India | Air India Engineering Services Ltd. | Air India Express | Air India-Singapore Air Transport Services |
| 2017-18 | 5348.18 Loss | 263.76 Loss | 62.90 Profit | 55.30 Loss | 444.43 Loss | 262.05 Profit | 52.2 Profit |
| 2016-17 | 6452.89 Loss | 286.71 Loss | 15.05 Profit | 61.77 Loss | 517.89 Loss | 235.42 Profit | 69.2 Profit |
| 2015-16 | 3836.78 | 198.75 Loss | 101.4 Profit | 57.80 Loss | 558.62 Loss | 361.68 Profit | 54.7 Profit |
Provisional figures issued by the government on 27th June’19 showed that the national carrier posted a loss of ₹7,365 crore in the year ended 31 March 2019, more than the ₹5,337 crore loss reported during 2017-18.
The flag carrier Air India has been forced to ground as many as 20 of its 127 aircraft, comprising both wide-bodies as well as single-aisle, as it does not have the funds to replace their engines, a senior official has said.
The loss-making carrier has a fleet of 127 planes of which 45 are Boeing wide-bodies (27 B787s and 18 B777s) and cater to the long-haul and ultra-long-haul international routes, and the rest are narrow-body Airbus A320s.
The Revival Plan
The Government has prepared a Revival Plan for Air India which includes a comprehensive financial package. The revival plan for Air India focuses on the operational efficiencies so that substantial increase in revenue or cost saving can be achieved. The Revival Plan, inter-alia, comprises several major elements includes:
- Higher levels of operational efficiency by strengthening management and implementing best practice business processes
- Robust organizational and governance reforms to be implemented by an eminent Board
- Differentiated business strategies for each Air India’s core businesses
- World-class HR practices to ensure a talented and motivated workforce and
- Sale of non-core real estate assets and strategic disinvestment of subsidiaries such as Air India Air Transport Services Ltd. (AIATSL).
The details of the funds infused into Air India by the Government during the last 3years are as under:
| Year | Amount (Rs. in Crore) |
| 2016-17 | 2465.21 |
| 2017-18 | 1800.00 |
| 2018-19 | 3975.00 |
It was reported on May 24 that, following a high-level meeting at the Prime Minister’s Office (PMO), Civil Aviation Secretary Pradeep Singh Kharola had sent a letter to AI, asking it “to finalise the financial accounts of the airline and its subsidiaries” for 2018-19 by the end of June. Consultancy firm Ernst & Young (EY) has been retained as the transaction advisor for the Air India sale.
The disinvestment of Air India will leave the country without a single government-owned airline and will result in the monopoly of private companies in the air travel market. Among other things, it would be impossible to keep a check on the prices of private players in the absence of any public-sector airline. And given that private companies operate with the sole motive of maximizing profits, who would service the loss-making routes that connect some of the remotest areas in the country?
