The civil aviation ministry on Wednesday said that the government is committed to the strategic disinvestment of Air India. It added that a plan is being prepared to run the airline ministry said.
While asserting that a decision on the future course would be taken in the best interests of Air India, Civil Aviation Minister Suresh Prabhu said the airline has been suffering from certain legacy issues, including huge debt.
"The government is committed to strategic disinvestment of Air India. What the modalities are, what the circumstances are, we have to monitor and evaluate as we go along," Minister of State for Civil Aviation Jayant Sinha said.
On Tuesday, a top official had said the government has for now dropped plans to sell majority stake in Air India as it may not be the right time to privatise the loss-making flag carrier in an election year.
About the process for 76 per cent stake sale in Air India that did not attract any bidders after the deadline ended on May 31, Sinha said nobody expressed any interest during that process.
"Just by that set of circumstances, it is clear that process is over and we have to move forward and consider other alternatives... As industry circumstances change, we will evaluate all those alternatives. If need be, we can restart that or any other process given the appropriate market conditions," he said.
On more infusion of funds into the airline, Sinha said the government is committed to supporting and strengthening Air India.
"Whatever Air India's financial requirements are, whatever their liquidity requirements are, we in the government are committed to supporting it as we have done in the past," he added.
Sinha also said the airline has gone through a remarkable operating turnaround. It is making operating profits.
In May, Air India's market share stood at 12.8 per cent, as per latest official data.
Both ministers were addressing a press conference about achievements of the civil aviation ministry in the last four years.
Under the proposed plan, the government was to sell 76 per cent stake in Air India along with complete divestment of low-cost arm Air India Express and a 50 per cent stake in Air India SATS Airport Services Pvt Ltd -- an equal joint venture with Singapore's SATS.
Responding to queries about the future of Air India, Prabhu said a plan is being prepared by the airline's management to ensure that it continues to operate efficiently.
"We are reviewing the situation from time to time.We will definitely make sure what is in the best interest of short term, medium term and long term interest of Air India will be done," he noted.
An empowered group of ministers reviewed the situation related to Air India on Monday.
"The aviation sector globally is facing lot of headwinds. The fuel costs, uncertainty over exchange rates have also caused lot of challenges to the aviation sector," Prabhu said, adding that keeping Air India healthy and efficient is an important priority for the government.
At the end of March 2017, the carrier had a debt burden of around Rs 48,877 crore. Out of the total amount, Rs 17,360 crore was related to aircraft and Rs 31,517 crore pertained to working capital loans.
The statement by the civil aviation ministry comes weeks after the flagship carrier's strategic stake sale failed to take off.
The government in March had finalised plans to divest a majority stake in Air India and offload about $5.1 billion of its debt, but prospective buyers stayed away, with some citing onerous terms as a reason for their lack of interest.