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Air India stake sale: Govt mulls absorbing employees in PSUs

16 January 2018

The government seems to have changed its earlier stance of not selling the entities of India's national carrier Air India separately as it now wants to split the company into four different verticals for its sale in December this year.

Sinha, however, declined to name potential bidders but said the management control would be retained by the local investors.

The government will also assume non-core debt of Air India before the sale, he added.

In order to ensure a smooth strategic disinvestment, the ministries are looking for options to revive the airline's fortunes.

Under a turnaround plan approved by the previous regime, Air India is to receive up to Rs 30,231 crore from the government subject to meeting certain performance thresholds. Air India Express reported a net profit of '296.7 crore in 2016-17.

The possibility of giving them a voluntary retirement package is also under consideration, according to the sources close to the development.

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"As a matter of fact, Air India has expanded its worldwide routes and Indians overseas have greatly appreciated the expansion", he wrote in the letter.

The proposed privatisation of Air India Ltd has gained momentum, with the government deciding to break the airline into four units and offer to sell at least 51% in each of them as part of a disinvestment plan.

"The aviation sector is a very fast growing sector, with really exciting opportunities for all participants, so we felt all of this will unlock growth and competitiveness of AI group", said Jayant Sinha.

Air India and its subsidiaries have around 29,000 employees, including those on contract.

"As per the extant policy, foreign airlines are allowed to invest under government approval route in the capital of Indian companies operating scheduled and non-scheduled air transport services, up to the limit of 49% of their paid-up capital".

Air India stake sale: Govt mulls absorbing employees in PSUs