Air India divestment: Raju says let us not get into any kind of speculation

The inter-ministerial group (IMG) that is to decide on the contours of Air India’s divestment is evaluating all options and is still in the process of receiving suggestions, Union civil aviation minister Ashok Gajapathi Raju told FE in an interview. “Let’s not go into any kind of speculation at this moment. The group of ministers has just met twice and is still in the process of inviting suggestions. As part of the group we are looking into all the possible options to make Air India a vibrant airline,” the minister explained.

This means that the IMG has still not ruled out the idea of selling the airline by hiving off the international operations from the domestic. Similarly, it has still not ruled out foreign airlines from buying Air India subject to the caps applicable to the aviation sector under the foreign direct investment rules. “Some of the subsidiaries of Air India have been profitable and there is interest from some quarters, and the IMG will take a decision in the due course of time,” the minister said.

Bird Company — a Gurgaon-based aviation services company — has shown interest in the ground handling subsidiary of the full-service carrier known as Air India Transport Services. Before that, IndiGo evinced interest in acquiring only the international operations and low-cost services, Air India Express, of Air India if the government was interested in selling the airline in parts.

The minister also said that there is no development regarding the unification of the bilateral rights of the four Emirate states — Abu Dhabi, Dubai, Sharjah and Ras al-Khaima — as of now. Though the Indian carriers and their counterparts from Dubai have utilised the deployed seats, in other sectors like Abu Dhabi and Sharjah the Indian carriers are yet to fully utilise the seats on offer.

“The decision to have four bilaterals with these states was taken by the government of another day and we don’t want to put the clock back. The decision has to be taken by the two countries. We have not approached them and neither have they approach us,” Raju said.

After the recent flights launched by IndiGo to Doha, the Indian carriers are expected to fullfill the 80% seat utilisation criteria with Qatar, subsequent to which there can be a revision. Qatar Airways has already asked for a revision in the bilateral seat arrangement in order to implement its expansion plans in India.

In terms of the implementation of the Regional Connectivity Scheme, Raju said he’s satisfied with the way things have been till now as leading carriers like IndiGo and SpiceJet have also ordered smaller aircraft like ATR 72 and Bombardier Q400 aircraft. The minister is also hopeful that Air Odisha and Air Deccan will start operations by the end of September. “Well, on some of the routes the airports needed some improvement in terms of infrastructure for operations to start. These two airlines we have checked have received the necessary approvals for starting the operations. So I hope they start by September,” the minister added.