Air India take off clears runway for more public sector unit selloffs. The sale of Air India to a private company has been planned for quite some time. Our story begins in Karachi, Pakistan, in the year 1932. Karachi was still part of united India at the time. 28-year-old Jehangir Ratanji Dadabhoy Tata stepped onto a single-engine plane and went to the skies on October 15, 1932. His original destination was Chennai and he planned to arrive after a brief stay in Mumbai. He also had a tiny pouch of airmail with him. 'First Flight Madras-Karachi Airmail Service,' it said. The Tata Group founded Air India in 1932, but after India got independence in 1947, the government purchased a 49 percent share in the company. The remaining portion was purchased by the government in 1953, and AI was nationalized. To cut costs, AI which flew international flights was combined with Indian Airlines, a domestic carrier, in 2007. However, the fact that the airline has never generated a profit since 2007 is a testament to how badly it was operated. Indeed, during 2009-10, the government has spent over Rs 1.1 lakh crore to either directly compensate for losses or to raise loans to do so. AI had a debt of Rs 61,562 crore as of August 2021. Furthermore, for every extra day that AI is operating, the government looses Rs 20 crore, or Rs 7,300 crore each year. Private players appeared uninterested as long as the government retained a certain stake in AI. That's because the mere prospect of government ownership, even if it was just 24 percent, it made private companies doubt if they'd have the operational flexibility needed to turn around such a heavily losing airline. Unlike previous attempts, the government this time offered 100% of its stake for sale. However, in terms of money, the agreement does not represent a significant step toward the government's disinvestment aim for this year. Furthermore, the Tatas will take care of Rs 15,300 crore of the total AI debt of Rs 61,562 crore, and will pay an extra Rs 2,700 crore in cash to the government. The debt now stands at Rs 43,562 crore. The government's assets, like as buildings, are expected to produce Rs 14,718 crore. However, the government will still be responsible for a debt of Rs 28,844 crore. For its part, the Centre can finally breathe a sigh of relief after successfully exiting the commercial aviation space, a high-cost industry that most governments around the world have left in the hands of private carriers in order to ensure that taxpayers' money is spent more wisely in social and strategic areas. Thank you.
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