Huge debt pile makes AI stake sale very difficult: Panagariya
Selling stake in Air India will be "very very difficult" with its debt burden of Rs 52,000 crore and the government has to decide if there should be partial or full write off of debt, NITI Aayog Vice Chairman Arvind Panagariya said on Friday.
Loss-making Air India, surviving on taxpayers' money, is facing tough business conditions amid stiff competition.
Stressing that the government has to first decide whether the national airline should be privatised or not, Panagariya said various issues need to be discussed.
"Assuming that the decision is made to privatise (Air India), then the issue comes what is the universe of potential buyers... only the national buyers or will we allow foreign entities also to bid for it," he said at a press meet here.
Panagariya noted that another issue is if the government should retain some stake in it, however small, "because there is the issue that it (Air India) is a national carrier and therefore, we should maintain that".
About the airline's debt burden, the NITI Aayog Vice Chairman said the last number he heard was Rs 52,000 crore.
"That's a very large number... selling it (Air India) with the existing debt is going to be very very difficult even say, it is open to both domestic and foreign buyers".
"Something will need to be done on debt issue also. The question largely is whether the government of India writes off the entire debt or some part of it. All this needs to be discussed," he said.
NITI Aayog has given its recommendations on making Air India strong and viable and those are being looked into by the Civil Aviation Ministry.
"NITI Aayog has given its suggestion to the Civil Aviation Ministry... Civil Aviation Ministry has to explore all the possibilities as to how the privatisation of Air India can be done," Finance Minister Arun Jaitley said on Thursday.
On Thursday, Jaitley and his Civil Aviation counterpart, Ashok Gajapathi Raju, discussed the future course for debt- ridden Air India and senior officials had indicated that a decision on privatisation would be taken within three months.
Air India has been in the red since the merger with Indian Airlines in 2007. However, it posted an operational profit of Rs 105 crore on account of low fuel prices and increased passenger numbers in 2015-16.
Staying afloat on little over Rs 30,000 crore bailout package extended by the previous UPA regime, Air India is in discussions with lenders on ways to restructure the loans.