As per The Hindu Business Line report by K Giriprakash, the Centre is exploring the idea of restructuring the debt of state-owned Air India Ltd, and is willing to talk to those who are interested in picking up a stake in the airline. “There is an idea circulating that Air India will do better if its debt is restructured,” Ashok Gajapathi Raju, Minister for Civil Aviation, Government of India said. However, he also stressed the need to evolve a consensus on the matter within his own Ministry. “Once you convince yourself, it is easier to convince the others.”
Air India, which has been posting losses for years now, has a debt of around INR 46,000 crore. Raju made it clear that Air India cannot expect support from the government all the time. “I am not someone who will indulge in ‘Air India-bashing’, but neither am I going to commit the taxpayers’ money for eternity.” He said the Centre was willing to help the airline “pull up its socks as they have done India proud on several occasions”. The airline needs to survive and a strategy to that end will be put in place.
Raju said that though debt restructuring will throw the national carrier a lifeline, the Ministry has to discuss the benefits of such a move. “We have to discuss the pros and cons and everyone has to be make up their mind. Within ourselves, we are not democratic. Just because you have the power to overrule does not mean we should use that power. No one is ‘Mr-Know-it-all’. We have to take all their suggestions.”
Raju said the Centre is willing to talk to players who may be interested in picking up a stake in Air India. The government, he added, was willing to help the private airlines too, albeit with policy benefits, but they will have to get their economics right. “We did some hand-holding for SpiceJet, and because of that, we were able to save about 5,000 jobs. SpiceJet too has recovered well now,” he pointed out.
He, however, ruled out a reduction in state taxes on air fares as the airline sector was not a subsidised sector. The Centre mops up as much as INR 12,000 crore from taxes while the States get between INR 2,000 crore and INR 3,000 crore. “The airline sector gets several benefits from the Centre and they should also contribute to the economy.” (Source: The Hindu Business Line)