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Govt seeks to pump Rs 23 billion into Air India after a failed sale bid

The airline, which has $8 billion debt on its book, hasn't made money in more than a decade

Abhijit Roy Chowdhury & Vrishti Beniwal | Bloomberg 

Air India invites bids from only central govt entities for Mumbai building

The government of Prime Minister Narendra Modi sought Parliament’s approval for an equity infusion of Rs 23 billion ($330 million) in Air India, effectively ruling out an immediate revival of its plan to sell the ailing carrier.

Modi’s bid to turn the airline profitable under his watch comes after the government failed to find any takers for its ambitious plan to privatize the national airline. Air India, which was offered along with $5 billion of its debt, is surviving on taxpayer bailouts after losing money for years.

The failed attempt to sell Air India -- Modi’s most high-profile privatization plan -- was a setback for prime minister’s effort to cement his credentials as a reformist steering the state away from running businesses ahead of an election due next year. The airline, which has $8 billion debt on its book, hasn’t made money in more than a decade.

The government has a four-part strategy for Air India -- a financial package, a branding refresh, organisational and governance reforms, and a plan to motivate staff, Jayant Sinha, junior aviation minister, said last week.

First Published: Thu, December 20 2018. 14:28 IST
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