Addendum
Deeply indebted Air India to be sold off
July 1st 2017
Almost 70 years after it was nationlised, the Indian government has announced that the country’s-debt laden flag carrier, Air India, will be privatized. Read More » Late last month, India’s finance minister, Arun Jaitley, said the nation’s cabinet had given “in principle approval for this disinvestment of the carrier”. He will head a task force for the sale of the airline, its related assets, hotel companies and its debt.
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In its glory days, Air India held a monopoly in its home market, but it has slowly lost market share to more service oriented rivals, especially the increasing number of low-cost carriers operating in India’s booming air passenger business.
Reuters said in June that budget airlines, IndiGo and Spicejet, hold a combined 42% of the market. Air India has 12.8 per cent. Analysts unilaterally agreed that privatization of the carrier was overdue. It ran at a loss for a decade and required a 2012 US$ five billion bailout package to keep flying. It reported a profit last year but it has unsustainable debt, a fact its latest and most realistic chairman and managing director, Ashwani Lohani, conceded earlier this year.
India’s aviation market is expanding by 20 per cent annually and is regarded as a huge potential market for airlines because of the its 1.2 billion population.
