Hardeep Singh Puri, Union Civil Aviation Minster
Hardeep Singh Puri, Union Civil Aviation MinsterCredit: Reuters

Union Minister for Civil aviation Hardeep Singh Puri on Thursday said that the government is determined to privatise national carrier Air India. Puri was addressing the media at a press conference in Delhi.

"The government's determination to privatise Air India is a given. We have to get the best possible deal and get it in the shortest time available. People are very much interested in acquiring Air India," said Puri.

He further added, "Procedure involved in the formation of an alternate mechanism, a group of ministers (GoM) headed by Union home minister Amit Shah has been formed. A meeting at Cabinet Secretariat level has also taken place."

The Union Minister said people are showing interest in acquiring the 'Maharajah'. "Total privatisation will be done in the shortest possible time and with the best deal. People are keen on acquiring Air India because it is a first-rate airline. Whoever acquires Air India will be very fortunate and will be able to run it according to strong private sector principles," he said.

He also said that the government should not be in the business of running the airline and it should be rather left to the private sector.

Air India pilots' strike
Air IndiaReuters

Earlier this month, the Parliament passed the Airports Economic Regulatory Authority of India (Amendment) Bill, 2019, increasing the threshold of annual passenger traffic for major airports to more than 35 lakh. During the debate, the ministry had said that the debt of Air India has become unsustainable.

In another development, Lenders of Air India Ltd. will soon get their major chunk of money back as Air India Assets Holding Ltd. (AIAHL), a special purpose vehicle (SPV) created for warehousing, which accumulated working capital debt of the national carrier, will repay ₹22,000 crore of around ₹29, 464 crore debt to banks next month.

Soaring net debt

Financial daily Mint reported that AIAHL is likely to raise ₹22,000 crore from the government-guaranteed bond in September, whose proceeding will be used to retire working capital debt parked in the SPV. At the end of the last financial year, Air India had a net debt of ₹58,351.93 crore up from about ₹55,000 crore during the same period last year.

Some of Air India's lenders include Allahabad Bank, Andhra Bank, State Bank of India (SBI), United Bank of India, UCO Bank, Union Bank of India, Punjab National Bank (PNB ), Deutsche Bank, HDFC, Standard Chartered, JP Morgan