In order to expedite the Air India disinvestment process, the government is likely to invite Expressions of Interest (EoIs) from interested parties in the next couple of weeks, as mentioned by an official. Speaking at the inaugural ceremony of the four-day aviation event, 'Wings India 2018', in Hyderabad, Civil Aviation Secretary RN Choubey said a revised EoI for disinvestment in Pawan Hans is also expected to be floated around the same time.
According to agency reports, aviation companies including InterGlobe Aviation's IndiGo, Turkey's Celebi Aviation Holdings and Tata Group have expressed interest in buying some of Air India's businesses. Last year in June, the Union Cabinet had approved privatisation of the debt-laden national carrier, which is kept afloat on taxpayers' money. On January 10, in an attempt to fast-track Air India's divestment process, the Cabinet allowed foreign airlines to invest upto 49% in Air India.
A group headed by Finance Minister Arun Jaitley with Rothschild and Ernst & Young as consultants has been appointed to chalk out the strategy for Air India's stake sale.
"Our ministry is presently engaged in the important task of finding buyers for Air India, its subsidiaries and Pawan Hans. We are committed to take it forward very, very fast," RN Choubey said. "We expect that the EoIs for Air India should come out possibly in the next couple of weeks. A revised EoI for Pawan Hans will also be coming forward around the same time," he further added.
The government is likely to split up Air India's various businesses before offering it for sale. The airline has six subsidiaries, out of which three are making losses, with assets worth about USD 4.6 billion. The government has pumped USD 3.6 billion since 2012 to bail out the airline.
Unlike how things are looking for the airline, air traffic in India has only increased. Choubey said India's domestic air passenger traffic has grown over 20 per cent in the last three years. However, because of the increasing oil prices, the growth this fiscal is expected to be around 17.5 per cent. Nevertheless, if oil prices remain below USD 80 per barrel, the travel demand is expected to grow at a compound annual growth rate (CAGR) of 15 per cent over the next 20 years, he said.
The government's regional air connectivity scheme 'Udan' has further boosted traffic growth in the country, Choubey said. "As many as 56 new airports have been added into the network in the last two years," he said.
Besides, many more airports are expected to be operational in the next six to eight months as by that time the second phase of Udan will also take off, he added.
(With agency inputs)