Air India deserves to be completely privatised, taking a cue from other state-run carriers such as British Airways, Japan Airlines and Austrian Air, according to Niti Aayog, the Modi government's think-tank, stepping up the ante after finance minister Arun Jaitley's remarks.
The government should completely divest its stake instead of a partial offloading to make the carrier financially viable, the Economic Times said, citing a report by the Niti Aayog to the Prime Minister's Office.
Civil aviation minister Gajapathi Raju had said a few days ago that there are various options to make the carrier regain its strength. "Niti Aayog has made suggestions to make Air India a strong and viable airline. All course of action is being examined by us. We have not closed any option," he told reporters in New Delhi on Tuesday, according to the daily.
The decision to probe these matters comes within days of finance minister Arun Jaitley making a case for privatizing loss-making Air India that has a share of around 14 percent in the domestic air traffic market with the rest held by IndiGo, Jet Airways, SpiceJet, GoAir and other private carriers.
Over the weekend, Jaitley had made a similar case with regard to the carrier's future, given its dwindling market share in India's domestic air traffic to 14 percent now from around 35 percent a decade ago."If 86 percent of flying can be handled by the private sector, so it can also handle 100 percent," Jaitley told state-run broadcast Doordarshan News.
Air India had reported operating profit of Rs. 105 crore on total revenues of Rs. 20,526 crore for financial year 2016-17.
The carrier's debt stands close to Rs 50,000 crore after a series of fund infusion by the government. "To run Air India, you have invested Rs. 50,000 crore. That money is government's money, that's your money. It could have been used for school education," Jaitley said during the interview, reiterating a case for privatising Air India in an indirect reference by the chief economic advisor Arvind Subramanian in the Economic Survey released early this year.
Two days ago, Air India was in the news after the Central Bureau of Investigation (CBI) registered three cases and initiated a preliminary inquiry over civil aviation decisions taken by the former Congress-led UPA government.
The three cases were for alleged irregularities in purchase of 111 aircraft costing about Rs. 70,000 crore, for leasing "large number of aircraft without due consideration" and for "giving up profit making routes and profit making timings of Air India in favour of national and international private airlines causing a huge loss to the national carrier."
The preliminary inquiry was in regard to the merger of Air India and Indian Airlines.
Meanwhile, aviation stocks were trading with gains on the Bombay Stock Exchange (BSE) on Wednesday morning. Jet Airways was up 2.21 percent at Rs. 469.70 after falling almost 5 percent in response to its weak Q4 results declared on Tuesday. SpiceJet was trading 4.05 percent higher at Rs. 105.45 and IndiGo-owner Interglobe Aviation was up 3.96 percent at Rs. 1,102.
The BSE Sensex was trading 26 points higher at 31,185, at around 12 noon. Mahindra, Lupin and Power Grid Corporation were top index gainers.
Jet Airways had reported a 95 percent in its Q4 net profit to Rs. 23 crore as against Rs. 426 crore in the corresponding period last year. Income rose 3.5 percent YoY to Rs. 5,728 crore from Rs. 5,533 crore, the full-service carrier said in its regulatory filings to the BSE on Tuesday.
