The Union Cabinet gave an in-principle approval for disinvestment of the government-run airline. Union Finance Minister Arun Jaitley said, “In-principle approval for Air India divestment has been given.” Besides, “The Civil Aviation Ministry’s proposal for the formation of a group under the chairmanship of the Finance Minister to decide the modalities of divestment process has also been accepted.”
However, Jaitley did not tell about any deadline for the formation of the group or the submission of a report. A panel will be formed to look at the quantum of stakesale. As per Jaitley, the members of the board will be decided by the Prime Minister.
The move will raise the hackles of trade unions and Left parties. They have succeeded to block disinvestment in the airline sector for more than 25 years.
Air India’s cut in the domestic aviation market is a mere 14 per cent. Indigo and Jet Airways are having the great hold in the market. In the global aviation sector, once reflected the strength of Air India, the profit margins are receding. Its carrier’s current losses stand at a staggering Rs 52,000 crore.
Niti Aayog had made a strong point to put national carrier on the sale bloc.