Civil Aviation Minister Hardeep Singh Puri on Monday said that the entire dues and arrears of Air India employees will be paid before the proposed disinvestment of the airline is concluded, as the government set the ball rolling for the privatisation of the national carrier.
"The employees' dues with arrears will be paid by Air India assets holding company before the closing of the proposed transaction," Puri told reporters at a press conference here.
Earlier today, the government invited preliminary bids to divest its entire stake in Air India, and the airline's subsidiary Air India Express along with its joint venture Air India SATS Airport Services Private Limited.
The Civil Aviation Minister had on January 2 met representatives of various employees unions of Air India and addressed their concerns regarding the privatisation of the national carrier.
The government has said that privatisation of debt-ridden airline has become a compulsion as fear grows about its shutdown."I had said earlier also, for us, it is not an option. Air India has to be privatised," Puri had told the representatives.
The minister had also said that debt over Air India has made it "unsustainable" and the national carrier needs to go in private hands to keep it running.
On Monday, Puri reiterated: "Due to its accumulated debt of around Rs 60,000 crore, the financial position could be described as very fragile and Air India can only be described as being under a debt trap. The newly constituted Air India mechsm, headed by the Home Minister, has approved to invite expression of interest from the interested bidders for strategic disinvestment of Air India," he added.
The minister further said: "The process that we have initiated today is qualitatively different from what happened in 2018. A lot of things were happening in 2018. The external environment was not entirely conducive and we were nearing Lok Sabha elections. This time, we are very clear in our approach."
Puri went on to say that running an airline in the civil aviation sector is laced with varied strains as it operates on thin margins.
"The civil aviation sector is capital intensive and extremely competitive. It requires rigorous training of its manpower, dynamic pricing, system which operates on very thin margins and is exposed to highly volatile aviation fuel pricing," he said.
"In this sector, those who make aircraft do very well in terms of profit, those who run airports also do well along with the ancillary sectors like tourism. But those who run airlines are very strained," he added.
Earlier today, the government invited preliminary bids to divest its entire stake in Air India, and the airline's subsidiary Air India Express along with its joint venture Air India SATS Airport Services Private Limited.
As per a preliminary information memorandum (PIM) issued by the Department of Investment and Public Asset Management, the last date for submission of expression of interest is March 17 and qualified bidders will be notified on March 31.
"As on November 1, 2019, Air India's authorized capital is Rs 3,50,00,00,00,000 divided into 35,00,00,00,000 equity shares of INR 10 each and its paid-up share capital is Rs 3,26,65,21,00,000 divided into 32,66,52,10,000 equity shares held by the President of India (aggregating to 100 per cent of the entire paid-up share capital of AI)," the PIM stated.
( With inputs from ANI )