No choice, but to privatise or close Air India: Aviation Minister

Union civil aviation minister Hardeep Singh Puri pointed out that Air India has been incurring Rs 20 crore loss every day and the national carrier has a cumulative debt of Rs 60,000 crore.

New Delhi: The government is looking at a new timeline for Air India disinvestment and financial bids will be invited in the coming days, Union minister Hardeep Singh Puri said on Friday.

Noting that there is no choice but to either "privatise or close" Air India, he said the government will have to keep the airline running till it gets divested.

"We are looking at another timeline now, what is called data room for prospective bidders to look at... that is opened up, 64 days for the financial bids to come in. After that it is the question of taking a decision and handing over the airline," the Minister of State for Civil Aviation said.

He was speaking at a session at the Times Network India Economic Conclave.

The government has started the process to sell its entire 100 per cent stake in Air India that has been in losses since it merged with Indian Airlines in 2007.

"...There is no choice, we either privatise or we close the airline. We run a loss of Rs 20 crore every day despite Air India making money now. Because the mismanagement has resulted in a cumulative debt of Rs 60,000 crore," Puri said.

"I don't have the capacity to keep going to Nirmala ji and say please give me some money," he said in an apparent reference to seeking funds to run Air India from the finance minister.

He also noted that earlier attempts at Air India privatisation were not successful because the attempts were half-hearted.

According to sources, the government has shortlisted Tata group and SpiceJet for acquiring the national carrier and they will receive Request For Proposal (RFP) from the government.

The Department of Investment and Public Asset Management (DIPAM) that falls under the Finance Ministry, will issue the RFP to the final contenders by the next week.

The RFP will help the bidders in carrying out due diligence.

The shortlisted entities for India Air India may be given time till early July for financial bids.

It is presumed that once the bids are locked, closure of the national carrier sale may take around 3 to 4 months post evaluation of financial bids.

(With PTI Inputs)