The Indian government has formally shelved the plan to sell a 76% stake in Air India (AI, Delhi International) as no bidders showed any interest, Civil Aviation Minister Jayant Sinha has been reported as saying by Reuters.
"We ran a disinvestment process where we made it very clear what type of bid we were interested in receiving. Nobody expressed any interest. That process right now is over so we have to move forward and consider other alternatives," Sinha has said.
He has added that the government will now look at other ways of restructuring the state-owned, debt-ridden airline. Short of giving any numbers or timeline, Sinha has signalled that the government is prepared to continue subsidising Air India for the time being.
It is recalled that the airline has recently launched a tender for a short-term INR10 billion rupee (USD147.4 million) loan. As of March 31, 2017, the carrier had an accumulated debt of some INR487.8 billion rupees.
Just a few days earlier, Sinha has said that the government would assist Air India with paying the overdue wages and financing its operations.
Until 2014, Air India used to receive an annual disbursement of INR30-40 billion from the government, although this amount has since diminished. For the fiscal year 2018/19, the government has earmarked just INR6.5 billion to support the airline as it expected to divest from the carrier.
The failed privatisation also threatens Prime Minister Narendra Modi's plan to keep the fiscal deficit below 3.3% of GDP.
