Disinvestment air india

Business standard:
Disinvestment of Air India and Pawan Hans would be completed in 2021-22, Finance Minister Nirmala
Sitharaman said on Monday while presenting the Union Budget in which Rs 3,224 crore has been
allocated to the Civil Aviation Ministry for the next fiscal year.
Air India is currently undergoing disinvestment process. Multiple entities submitted their expression of
interest (EOI) for the carrier in December. The government is likely to reveal the names of qualified
bidders in the coming weeks.
Air India Asset Holding Ltd, a special purpose vehicle (SPV), was set up in 2018 as part of the financial
restructuring of the debt-laden national carrier. In the Budget for 2021-22, Rs 2,268 crore is proposed
to be allocated for the SPV.
The debt of Air India, as of March 31, 2019, was Rs 58,255 crore.
Making another attempt to exit from the chopper operations business, the government in December
last year issued a fresh bid document for strategic disinvestment in Pawan Hans.
Sitharaman said in her budget speech that the disinvestment of Air India and Pawan Hans would be
completed in 2021-22.
In the Union Budget for 2021-22, the Ministry of Civil Aviation has been allocated Rs 3,224 crore which
is 22 percent lower than Rs 4,131 crore that was allocated for the current fiscal.
The budget last year had allocated Rs 3,797 crore to the ministry for 2020-21 but in the revised
estimates it increased to Rs 4,131 crore.
The government on Monday allocated Rs 600 crore, 14.28 percent lower than the current fiscal, for
regional connectivity scheme Udan for 2021-22.
Under the Udan scheme, financial incentives from the Centre, state governments and airport operators
are extended to selected airlines to encourage operations from unserved and under-served airports,
and keep airfares affordable.
Sitharaman said in her speech that the government would be monetising assets of the AAI-operated
airports in tier-2 and tier-3 cities to raise money for building new infrastructure.
The Airports Authority of India (AAI), which works under the Civil Aviation Ministry, owns and operates
around 100 airports in India.
Sitharaman's announcement on Monday about completing Air India's disinvestment in 2021-22 is
significant as the Narendra Modi government's first attempt to sell 76 percent stake in the national
carrier was unsuccessful in 2018.
The government restarted Air India's disinvestment process in January 2019. This time, the
government is selling its entire stake in the state-owned airline, including Air India's 100 percent
shareholding in Air India Express Ltd and 50 percent in Air India SATS Airport Services Private Ltd.
The government had decided in 2019 that Air India's disinvestment would be done on the basis of
enterprise value instead of equity value to make the carrier more attractive to prospective buyers.
Enterprise value is calculated by considering debt as well as cash with the company.
The government made it clear in October that a minimum of 15 percent of the enterprise value quoted
by the bidder would have to be paid in cash and the rest can be taken as debt with Air India.
Live mint:

The disinvestment of cash-strapped Air India is likely to happen by the end of this year, Union Civil
Aviation Minister Hardeep Singh Puri said on Friday.
Puri said the disinvestment process of Air India got delayed due to the second wave of the Covid-19
pandemic and assured that the disinvestment process will happen in 2021.
"Air India is getting disinvested. It will take some time due to the pandemic. I want to assure you that it
(AI Disinvestment) will happen this year," the Union Minister told ANI news agency.
The second wave of Covid-19 may slow down the disinvestment process but he has assured that the
disinvestment of Air India will be completed in 2021.
Earlier on March 27, 2021, Puri had said that Air India would be brought under a private player in late
May or June.
Due to the ongoing Covid-19 pandemic, bidders are unable to travel for physical meetings and an
important formality that will have to be done before AI is privatized.
"Air India is still in the debt of ₹60,000 crore and it's liable to be sold," Puri had said in a statement.
The aviation minister had also said the interest of Air India employees would be safeguarded whenever
the disinvestment process begins.

Air india introduction:

Air India is the flag carrier airline of India, headquartered at New Delhi.[8] It is owned by Air India
Limited, a government-owned enterprise, and operates a fleet of Airbus and Boeing aircraft serving
102 domestic and international destinations. The airline has its hub at Indira Gandhi International
Airport, New Delhi, alongside several focus cities across India. Air India is the largest international
carrier out of India with an 18.6% market share.[9] Over 60 international destinations are served by Air
India across four continents. The airline became the 27th member of Star Alliance on 11 July 2014.
The airline was founded by J. R. D. Tata as Tata Airlines in 1932; Tata himself flew its first single-
engine de Havilland Puss Moth, carrying air mail from Karachi's Drigh Road Aerodrome to
Bombay's Juhu aerodrome and later continuing to Madras (currently Chennai). After World War II, it
became a public limited company and was renamed as Air India. On 21 February 1960, it took delivery
of its first Boeing 707 named Gauri Shankar and became the first Asian airline to induct a jet aircraft in
its fleet.[10] In 2000–01, attempts were made to privatise Air India and from 2006 onwards, it suffered
losses after its merger with Indian Airlines.
Air India also operates flights to domestic and Asian destinations through its subsidiaries Alliance
Air and Air India Express. Air India's mascot is the Maharajah (Emperor) and the logo consists of a
flying swan with the wheel of Konark inside it.
Privatisation:
On 28 June 2017, the Government of India approved the privatisation of Air India. A committee has
been set up to start the process. [71] In March 2018, the Government issued an Expression of Interest
(EOI) to sell 76% stake of Air India, along with low-cost airline Air India Express, and a 50% stake of
AISATS, a ground handling joint venture with Singapore Airport Terminal Services (SATS). According
to the EOI, the new owner would have to take on a debt of ₹33,392 crore (US$4.7 billion) and a bid
would have to he submitted by mid-May as the Government wanted to complete the selling process by
the end of 2018,[72] but no private firms showed any interest in buying the debt-laden airline. [73]
Having failed on previous occasions to sell the airline, the Government decided to sell 100% share of
the airline and started its preparation in late-2019. On 27 January 2020, Government released the
Expression of Interest (EOI) to invite bidders. This time Govt. decided to sell 100% shares of both Air
India and its budget carrier Air India Express as well as 50% shares of AISATS and to attract more
bidders this time, the government has already decreased nearly ₹30,000 crore (US$4.2 billion) of
debts and liabilities in a Special Purpose Vehicle (SPV).[74][75]

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