AIR INDIA

air-india:-puri-to-meet-trade-unions-amid-sale-process

Air India: Puri to meet trade unions amid sale process

New Delhi: Amid government’s attempt to sell stake in Air India, trade unions of the aviation company are likely to demand a VRS package at their second meeting with Minister of State for Civil Aviation Hardeep Singh Puri. He is likely to meet over a dozen Air India unions including unrecognised ones.

This is for the second time in a month over airline's privatisation plans. The government is planning to float Expression of Interest (EoI) for selling its entire 100 per cent stake in the loss-making flag carrier some time next week.

The minister had made it clear that privatisation was the only option before the government at the first meeting on January 2, 2020 to keep the airline afloat and sought employees cooperation in carrying out the disinvestment process.

Puri had also told unions that he would call them again after the meeting of the ministerial panel on Air India disinvestment. The GoM led by Union Home Minister Amit Shah on January 7 approved the plan to invite EoI and the sale-purchase agreement for the disinvestment of the state-run carrier.

20 Jan 2020
overseas-carriers-unlikely-to-be-allowed-over-49%-stake-in-air-india

Overseas carriers unlikely to be allowed over 49% stake in Air India

The government is trying hard to sell stakes of Air India but overseas carriers are unlikely to be able to bid for more than 49 per cent of the national career. They won’t also get full operational control as Union civil aviation ministry has rejected a proposal to relax the Substantial Ownership and Effective Control (SOEC) clause. The Centre wants to privatise the state-owned national carrier but it failed to sell stakes of Air India in 2018.

 

The new owner of Air India will offer a VR) to employees. As per the approved plan, Air India will be put on sale along with low-cost international subsidiary Air India Express as well as a 50 per cent stake in ground-handling company Air India Singapore Airport Terminal Services. Alliance Air and the ground handling and engineering subsidiaries will be sold separately.

16 Jan 2020
air-india:-puri-to-meet-trade-unions-amid-sale-process

Air India: Puri to meet trade unions amid sale process

By IndianMandarins 20 Jan 2020

New Delhi: Amid government’s attempt to sell stake in Air India, trade unions of the aviation company are likely to demand a VRS package at their second meeting with Minister of State for Civil Aviation Hardeep Singh Puri. He is likely to meet over a dozen Air India unions including unrecognised ones.

This is for the second time in a month over airline's privatisation plans. The government is planning to float Expression of Interest (EoI) for selling its entire 100 per cent stake in the loss-making flag carrier some time next week.

The minister had made it clear that privatisation was the only option before the government at the first meeting on January 2, 2020 to keep the airline afloat and sought employees cooperation in carrying out the disinvestment process.

Puri had also told unions that he would call them again after the meeting of the ministerial panel on Air India disinvestment. The GoM led by Union Home Minister Amit Shah on January 7 approved the plan to invite EoI and the sale-purchase agreement for the disinvestment of the state-run carrier.

overseas-carriers-unlikely-to-be-allowed-over-49%-stake-in-air-india

Overseas carriers unlikely to be allowed over 49% stake in Air India

By IndianMandarins 16 Jan 2020

The government is trying hard to sell stakes of Air India but overseas carriers are unlikely to be able to bid for more than 49 per cent of the national career. They won’t also get full operational control as Union civil aviation ministry has rejected a proposal to relax the Substantial Ownership and Effective Control (SOEC) clause. The Centre wants to privatise the state-owned national carrier but it failed to sell stakes of Air India in 2018.

 

The new owner of Air India will offer a VR) to employees. As per the approved plan, Air India will be put on sale along with low-cost international subsidiary Air India Express as well as a 50 per cent stake in ground-handling company Air India Singapore Airport Terminal Services. Alliance Air and the ground handling and engineering subsidiaries will be sold separately.

cmd-air-india:-lohani-may-get-extension-

CMD Air India: Lohani may get extension?

By IndianMandarins 09 Jan 2020

Amid government’s approval of a draft document inviting expressions of interest by the end of January 2020 the outgoing Air India CMD Ashwani Lohani is tipped for another extension. Lohani’s tenure as CMD is coming to end on February 15, 2020.

Indianmandarins has reliably learnt that top authorities have arrived at a consensus to extend Lohani’s tenure which may be formalised soon.

Further, it may be underlined that about half of the debt has already been transferred to the SPV and the government may further approve transfer of Air India’s debt to a special purpose vehicle (SPV). However, it was not clear what the government plans to do with Air India’s large workforce, currently more than 20,000, including that of its subsidiaries. Air India has 128 aircraft in its fleet. A cash shortage has forced the grounding of 26 of its aircrafts.

bpcl,-concor-and-air-india-sale-to-be-delayed;-likely-after-march

BPCL, Concor and Air India sale to be delayed; likely after March

By IndianMandarins 03 Jan 2020

It is likely that the government may not be able to complete sale of BPCL, Concor, and Air India by March-end. Actually the government has to respond to what the potential bidders ask for. Sometimes, they seek time to examine financial statements. Sometimes, they want to do physical due diligence.

The delay in divestment plans comes when the government’s fiscal deficit has touched 115 per cent of the FY20 Budget estimate by November. Besides, revenue from other sources such as taxes is also likely to fall short of the target. The government may miss the tax target of Rs 24.6 lakh crore by at least Rs 2 lakh crore on account of the corporation tax rate cut, lacklustre GST collections, and the economic slowdown. As much as 42 per cent of the revenue collections (excluding cess and surcharge) will go to states.

The government had set a disinvestment target of Rs 1.05 lakh crore for 2019-20. However, in FY20 so far, the government has managed to raise Rs 17,364 crore through disinvestment; 84 per cent of its disinvestment target is yet to be realised.

air-india-to-be-grounded-by-june-2020-if-not-rescued-or-sold-out!

Air India to be grounded by June 2020 if not rescued or sold out!

By IndianMandarins 31 Dec 2019

National career Air India that is struggling to keep flying is likely to be forced to shut shops by June 2020 unless it finds a buyer as piecemeal arrangements cannot be sustained for long. Amid continuing uncertainty over the fate of the national carrier, there is also need for funds to restart operations of 12 grounded narrow-body planes.

With alarm bells ringing, Air India may go Jet Airways way if a prospective buyer does not come on board by June 2020. With the government leaving the debt-ridden airline to fend for itself by refusing to inject funds any more amid its privatisation plans, the airline is some how keeping it afloat with peace meal arrangements.

The government claims to have infused funds to the tune of Rs 30,520.21 crore in the flag carrier from financial year 2011-12 till December this year. Under the turnaround plan approved by the UPA regime in 2012, the airline was to get financial assistance of Rs 30,000 crore over a 10-year period.

After more than 25 years of flying, full service carrier Jet Airways shuttered operations in April due to cash crunch. In 2018-19, Air India's net loss is provisionally estimated to be Rs 8,556.35 crore.

Besides, it has a total debt of Rs 60,000 crore, half of which has already taken out of the books and parked in the special purpose vehicle, Air India Asset Holding Ltd.

financial-situation-of-air-india-untenable

Financial situation of Air India untenable

By IndianMandarins 18 Dec 2019

After facebook post, Air India chairman Ashwani Lohani has warned of flight disruptions and possible invocation of government guarantee because of delays in fundraising and refinance of aircraft debt. The national career is facing a cash crunch due to lack of fund infusion and monthly shortfall of Rs 220 crore in operations.

The aviation major is seeking the government approval to raise Rs 2,000-crore loan and refinance $819-million aircraft debt that would help tide over the financial crisis. “The overall financial situation of the airline is grossly untenable and it may not be able to sustain physical operations in the absence of immediate government intervention and support,” Lohani writes to the civil aviation ministry.

Air India received an offer from a consortium of four banks to refinance the $819 million bridge loan taken for acquiring six Boeing 787 and one Boeing 777 aircraft. The government guarantee in respect to the bridge loan will expire on December 27 and the airline has sought government nod to refinance it before end of the month.

air-india-needs-to-survive-till-sold:-lohani-shares-anguish-on-facebook

Air India needs to survive till sold: Lohani shares anguish on facebook

By IndianMandarins 16 Dec 2019

In a fresh plea to the government for funds, the outgoing Chairman of Air India Ashwani Lohani has written a Facebook post saying Air India needs to survive till it is sold. Lohani’s comment comes almost approx. 60 days ahead of completion his term ending 14.02.2020. He recently highlighted the airline’s grim financial health in a letter to the civil aviation ministry.

This is to recall that over the past few months, Air India is seeking government guarantee to raise a Rs 2,000-crore loan. So far, the government has not acted on the request. The airline would default on payment obligations if capital is not raised.

Air India is losing Rs 150-200 crore each month despite 10 per cent year-on-year increase in revenue. Liquidity situation remains extremely tight and salary for the month of November was disbursed on December 11. Civil Aviation Minister Hardeep Singh Puri’s recent remark that the government would shut down the airline if fails to find a buyer has also made travel agents and vendors jittery.

“Air India needs to survive till it is sold. I wonder why is it so difficult for this appreciation to sink in and also that in this environment of disinvestment, expecting a radical improvement bordering on a turnaround is an impractical thought. That output can be given sans input is a grossly impractical thought,” Lohani writes in his post.

govt-feels-bpcl-to-garner-bulk-of-proceeds-for-rs-1.05-tn-disinvestment-targets

Govt feels BPCL to garner bulk of proceeds for Rs 1.05 tn disinvestment targets

By IndianMandarins 07 Dec 2019

The government trying to meet the target of Rs 1.05 trillion by disinvestment to infuse liquidity into the market to perk it up is confident of achieving it in 2019-20 financial year even without the Air India sale this year.

It is learnt from the top government sources that the central government is open to the idea of deferring Air India’s stake sale for the next financial year due to some issues within the government career. However, the disinvestment of Bharat Petroleum Corporation (BPCL) is likely to be completed before March 31, 2020 and it will form the bulk of the proceeds.

There are certain complexities involving the Air India privatisation proposal, including the increasing debt that the aviation company, so its disinvestment will go for next financial year.

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Indianmandarins.com, an initiative of New Media Network, is a multi-media initiative for the fast and real-time dissemination of news and information related to civil services, central PSUs and other institutions that play a critical role in governance, administration, corporate governance, and public life in India. We aspire to provide our esteemed readers with news breaks and situation analysis in the above-mentioned domain of operations. Currently, we are available at www.indianmandarins.com. We are now planning to branch off into print publication and few other related business initiatives.