ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

A+| A| A-

Preparing the Script for Privatisation

The privatisation of Air India marks the gradual erosion of the public sector and inclusive employment.

 

The government finally concluded the sale of the national carrier Air India to Talace Pvt Ltd, a wholly owned subsidiary of the Tata Sons group. The sale includes the transfer of complete management control and 100% stake in Air India and Air India Express along with a 50% stake in the Air India SATS Airport Handling Services. The Tata Groups successful bid of `18,000 crore includes about a quarter of Air Indias outstanding debt. The government has transferred the remaining debt of around `46,262 crore to a special purpose vehicle, Air India Assets Holding Ltd (AIAHL), to facilitate the repayment of this outstanding amount. Meanwhile, the remaining subsidiaries and non-core assets will also be transferred to AIAHL and could possibly be disinvested or privatised in the future. As a part of this privatisation deal, it is reported that the approximately 13,000 employees of Air India will be guaranteed employment in the new set-up for at least one year. Unsurprisingly, while the narrative has consistently portrayed a debt-ridden entity bleeding taxpayers money, the story reveals a deeper debt that the government will incur in the coming days of a purposive installation of market-led development at the cost of people-centric priorities.

The Tata Group, which has stoked nostalgia amidst certain circles (considering Air Indias origins can be traced to Tata Airlines founded by J R D Tata), has a small market presence in the domestic civil aviation sector with two joint ventures, Vistara and AirAsia India. It will now stand to significantly increase its presence with this new acquisition, while also gaining access to Air Indias international footprint, unmatched by any other airline in India. Currently, estimates suggest that this could mean at least a quarter or one-third of the domestic market share, and with IndiGo currently having the largest market share, this could impact the scope for other players. Somehow, privatisation in this case seems to be shifting towards a lesser competitive playing field, possibly creating quasi-monopolistic possibilities, especially considering that most airlines have been struggling owing to the pandemic.

Dear Reader,

To continue reading, become a subscriber.

Explore our attractive subscription offers.

Click here

Or

To gain instant access to this article (download).


Pay
INR 59

(Readers in India)


Pay
$ 6

(Readers outside India)

Published On : 17th Jan, 2024

Support Us

Your Support will ensure EPW’s financial viability and sustainability.

The EPW produces independent and public-spirited scholarship and analyses of contemporary affairs every week. EPW is one of the few publications that keep alive the spirit of intellectual inquiry in the Indian media.

Often described as a publication with a “social conscience,” EPW has never shied away from taking strong editorial positions. Our publication is free from political pressure, or commercial interests. Our editorial independence is our pride.

We rely on your support to continue the endeavour of highlighting the challenges faced by the disadvantaged, writings from the margins, and scholarship on the most pertinent issues that concern contemporary Indian society.

Every contribution is valuable for our future.