Disinvestment, yes, but Air India will be in Indian hands

New Delhi, July 11 (IANS) Civil Aviation Minister Hardeep Singh Puri on Thursday said the government was committed to "strategic disinvestment" of Air India due to "unsustainable debt burden" but promised that the national carrier will remain with an Indian entity.

Responding to supplementaries during Question Hour in the Lok Sabha, Puri also said that though Air India was doing "extremely well", the debt burden on the carrier was unsustainable.

He said the decision on Air India's privatization was for the benefit of citizens and the government will do its best to ensure that the company was purchased by an Indian entity.

"It is not the government which has failed to attract the passengers. Air India in fact is a first class asset. It has 125 planes. Half of them fly to 40 international directions and 80 to domestic destinations. It is doing extremely well.

"The problem is that it has taken an unsustainable debt burden. It is servicing of that debt burden which is a problem," Puri said.

Replying to a question from Congress member Manish Tewari, the Minister said: "Previous attempts to disinvest the carrier could not succeed. But now the government has learnt its lessons and a mechanism will ensure the move (succeeds) this time...

"But the government wants the airline to remain in Indian hands and the disinvestment mechanism will take care of the details," Puri said.

The Minister also told the Lower House that when the Pakistan airspace was closed following a stand-off between the two countries, Air India had to spend an extra Rs 430 crore on longer routes.

Puri said it was only a "narrative" that the domestic civil aviation market was declining.

"In fact it has seen a steady annual growth of 17 per cent. Contrary to speculation, the number of flights haven't gone down either."