Air India Privatisation: The pervasive impact of the epidemic on Air India

Air India Privatisation: The pervasive impact of the epidemic on Air India
Air India Privatisation
Air India Privatisation: The pervasive impact of the epidemic on Air India
Air India Privatisation

Air India Privatisation: The pervasive impact of the epidemic on Air India. The central government has extended the deadline for submitting a letter of interest. To sell to Air India from 31 August to 30 October. The Finance Ministry said that due to the Corona epidemic the deadline has increased.  The process of selling it was started on 27 January. This is the fourth time that the government has extended the date of submission of letters of interest.

However, even after the extension of the date of submission of the letter of interest. Tata Airlines, which was started by JRD Tata in 1932, is likely to be bought again by the Tata group. It is noteworthy that in the year 1946, Tata Airlines was named Air India. And in the year 1947 the Government of India became the largest shareholder by investing in it and it was nationalized in the year 1953.

Air India Privatisation: The pervasive impact of the epidemic on Air India

Bidders for Air India may be offered 100 per cent stake in Air India, all its aircraft, operational slots and employees, with some relief in debt. However, the government can keep four Boeing 747 aircraft out of the sale process for its own use. However, given the negative impact of the Corona epidemic, it is believed that Air India will not be bidding for a large amount, as the valuation of airlines has declined due to Corona. The financial situation of the aviation sector has deteriorated so much that some airlines have applied for bankruptcy, while some have sought relief packages from the government.

In such adverse situation, only limited airlines will bid for Air India, it is being feared. Even in the year 2018, the government was looking to sell Air India, but no company was ready to buy it, as the government wanted to hold a 24 percent stake in it and it was heavily burdened. It is known that under the bailout package announced in April 2012, the government has pumped over Rs 26,000 crore in capital to Air India. However, it did not yield the expected results.

Air India’s operations will improve after the end of the Corona epidemic

However, the Tata group believes that through better operations and efficient management, profits can be made from Air India. And assuming that Air India’s operations will improve after the end of the Corona epidemic. Together, it is expected to benefit from international flights, as Air India continues to dominate international flights. Even today Air India has a 17 percent share in the international passenger market. After the closure of Jet Airways, Air India has increased its dominance on the Indo-US route. Most other Indian airlines are cheap airlines and most airlines have limited global operations except for IndiGo.

Impact of epidemic on airlines:

International flights have still not started in India due to Corona epidemic. Under the Vande Mataram Mission – only Air India aircraft are being operated as international flights. Meanwhile, Air India has had to close its offices in five European cities such as, Copenhagen, Milan, Stockholm, Madrid and Viana. Air India is preparing a long list of employees on leave without pay. It is believed that a large number of Air India employees can be sent on long leave of six months to two years. There have also been extensive cuts in the salaries of employees.

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