Air India carrier has been in news for a long time now. Vigorous efforts are being made to revive the debt-ridden airline. Air India is of significant importance to the country. The government-owned carrier has been a part of the Indian freedom struggle as much as its revolutionists and public. Apart from representing India¡¯s cultural identity, it has been a part of its highs and lows, quite literally!
Founded in 1932, it commenced its operations only after independence in 1946. A colour scheme of red and white and a ¡®Maharaja¡¯ mascot aimed at delivering an image of royalty but for the common public.
¡®Your Palace In The Sky¡¯ soon merged with Indian airlines to deliver operations. However, by 2017 the airlines were under an estimated debt of 487.81 million rupees.
Soon, it had to sell three Airbus A300, from there the downfall of the carrier started. While ill-timed merger and the purchase of new aircraft were believed to be the reason behind its poor financial condition, the government invited potential buyers to purchase 76% of AI¡¯s stakes.
1. Though, privatisation was discouraged by political leaders on the grounds that it shouldn¡¯t be made a foreign airline. Co-convener of RSS-affiliated Swadeshi Jagran Manch, Ashwani Mahajan even disapproved of Air India¡¯s divestment saying rather than selling the stake in the national carrier, the government can reduce its debt by selling off its land, the Economic Times reported.
2. Despite extending the bidding deadline to May end, Air India didn¡¯t acquire any potential bidders. Earlier, IndiGo had given a formal expression of interest for the airline arm in terms of ¡°international operations of AI and AI Express¡± or ¡°alternatively all of the airline operations of AI and AI Express¡± but a formal interest never reached AI.
3. Qatar Airways had been keen to pick up a stake in IndiGo for years but the Indian low-cost carrier had been ¡°politely declining¡± the same. As AI announced its privatization, industry insiders were counting on the chances of Qatar Airways tying up with some other Indian carrier to bid for the Maharaja. However, no formal communication was sent across. Payment of AI¡¯s employees was not expected to see the light of the day. The Times of India reported that the three banks which had sanctioned Rs 1,000 crore of loan withdrew it later on, which resulted in a cash crunch as well.
4. To tackle non-payment issue, the government had decided to include a clause in the share purchase agreement so that the employees do not lose job soon after the deal. According to a Business Standard report, the successful bidder will have to take the employees of Air India and Air India Express on its payroll for a period of one year after the completion of the sale. However, this clause also couldn¡¯t find its way since no bidder came forward.
5. The ¡®Maharaja¡¯ makeover was the next step to revive the beleaguered airlines. Minister of state for civil aviation Jayant Sinha hence, announced the 'Maharaja Direct' business class seats on its international flights starting June 23.
6. The latest makeover will include an upgraded first and business class version in ambience, upholstery, woollen blankets and night kit facilities. Exotic cuisine from around the world and a brand new uniform for the on-board crew is also on the cards.
7. It was announced that the existing first class and business class seats that travel to the United States will get an expensive look to it by the end of July while air rides to the European destinations on the Boeing 787 aircraft will take another month. The move is also directed at raising the business class occupancy from 60 to about 80 per cent.
8. In a latest move, the government on Tuesday sought parliament approval to inject 9.8 billion rupees ($142.87 million) in ailing national carrier Air India during the current fiscal year, reported Reuters.
The first look of 'Maharaja Direct' (Photo: Air India)
An Air India source told the agency on Monday that it had sought 21.21 billion rupees ($309 million) of additional equity from the government for 2018/19 to make pending payments to its vendors. The government is seeking parliament¡¯s approval for an additional net spending of 59.51 billion rupees on top of the budgeted 24.42 trillion rupees for 2018/19.
AI¡¯s sale was crucial to Prime Minister, Narendra Modi¡¯s plans to keep the fiscal deficit at 3.3 per cent of GDP. Junior Civil Aviation Minister Jayant Sinha had said last month the government will continue to support the loss-making airline¡¯s financial requirements while it works on alternatives.