India is thinking of selling a bigger share in Air India to an investor. Prior to this, a $3.6 billion bailout could not fix the situation of the loss-making airline, according to Bloomberg.
Unnamed industry sources said that the proposition should recover the airline within five years of selling a 51% share. The negotiations are still in the first stage but the Ministry of Finance and the Prime Minister’s office have already seen the presentations of the proposal.
Nevertheless, neither the Ministry of Finance, nor Air India‘s representatives agreed to comment upon the situation. Civil Aviation Secretary R.N. Choubey in New Delhi said that the government does not intend to sell the 51% share.
To make Air India appealing to investors, Prime Minister Narendra Modi’s administration is due to deal with the carrier‘s $7 billion debt, said Mark Martin, founder of Dubai-based Martin Consulting LLC. He added that “it’s a welcome step but premature,” as quoted by Bloomberg. India’s finance ministry seeks to detalise the plan to be sure that there would be buyers after the proposal is announced.
According to the national ranking, the airline‘s share in the domestic market has dropped from 35% to 14% in a recent decade. Although the company made an operating profit of about $15 million in the year through March 2016, it still recorded a net loss of $576 million, according to the government.