Air India Revival Would Require Rs 50,000 crore, Unions Ask PM

A Joint Forum of Air India Unions on May 27 has urged the central government to grant a financial package of Rs 50,000 crore for Air India arguing that it will ensure the revival of the airlines. The demand comes at a time when the government seems to be going ahead with its plans for privatisation of the entity despite Air India’s crucial services during the COVID-19 pandemic. 

In the last week of April, the government extended the last date for submission of expression of interests for bidders to June 30, for the proposed strategic disinvestment of Air India Ltd by way of the transfer of management control and sale of 100% equity share capital of the entity owned by the government. This includes Air India’s shareholding interest of 100% in Air India Express Limited and 50% in Air India SATS Airport Services Private Limited. 

Addressing the letter to Prime Minister Narendra Modi, the joint forum of Air India Unions recalled the crucial role played by Air India in bringing back stranded Indians from across countries and its operation of chartered and cargo flights for the movement of medicines and medical equipment between India and other countries. 

Stating that it is established beyond doubt that it is necessary for the government to protect and promote Air India in the interest of the nation, the joint forum sought Rs 50,000 crore financial package to ensure that Air India emerges as the “strongest and best Airline of India.” The unions include All India Service Engineers’ Association, Aviation Industry Employees’ Guild, Air India AirCraft Engineers’ Association, Air Corporations SC/ST Employees’ Association and Aviation Managers’ Association, among others. 

V A George, joint convenor of Aviation Industry Employees’ Guild says that the role played by Air India amid the pandemic has proven that it is the saviour of the country in times of emergency or any calamity. “Alongside bringing back stranded Indians in various parts of the world amid COVID-19 threat, Air India has operated several charter flights for import and export of medicines and medical equipment,” George told NewsClick. He added that the central government’s Rs 20 lakh crore financial package to boost industry and economy has nothing in it for the aviation sector which is one of the most affected sectors due to the pandemic. 

“In the current scenario when trade practices are changing globally, it is high time for the government to stop its privatisation plans and rescue Air India which will carry out all new trade related requirements of India,” suggested George. 

It is to be noted that the government has not yet disclosed the valuation of the state-run airline and its subsidiaries but stated that the net working capital of the entity is zero (meaning Air India’s current assets are equal to its current liabilities). Moreover, in its sale offer, the government has also decided to lower the debt to Rs 23,283 crore from Rs 60,074, that is to be transferred to the prospective buyers. The difference, Rs 36,791 crore was supposed to be written off.

“While the government was willing to forgo a substantial amount for selling the entity to private players, with the economic situation changing, it is time for the government to reconsider its privatisation plans and boost Air India for strengthening the aviation sector in the country,” said George. He added that the Rs 50,000 crore is being demanded after consulting all unions and analysing the current situation of Air India. 

In spite of disruptions across sectors amid pandemic, besides Air India, other public sector entities such as Bharat Petroleum Corporation Limited, Ordnance factories and other PSUs have operated providing essential services for the requirement of the country. 

While the government’s privatisation was in line with the Niti Aayog’s reforms for countering economic slowdown and for raising cash reserves, with a turnaround in the whole economic situation and the role played by the PSUs during pandemic, the government’s push for privatisation of PSUs holds no air.