It is not clear what the government hoped to achieve when it chose to issue a correction after civil aviation minister Hardeep Singh Puri told Parliament that the plan to sell Air India (AI) had been shelved due to high oil prices and a volatile rupee. After Puri’s statement, his own ministry issued a clarification saying the process of privatisation was still on and that Puri’s statement actually referred to an analysis that was done last year. In other words, the government would have us believe that it is just a matter of time before a buyer is found for AI. While such a move may boost market sentiment—it suggests the government’s zeal for tough reforms is very much there—this is difficult to believe since even a Jet Airways is finding it difficult to find a buyer; how will AI, whose balance sheeet is so much more compromised, and which has a lot more people who are so heavily unionised they even fight over who should fly which type of plane? And, what does it say about the government’s attempt to clean up AI that, as per Puri’s statement, AI’s net debt rose to Rs 58,352 crore at the end of March 2019, rising from about Rs 55,000 crore in FY18; and in a year when Jet Airways cancelled so many flights in the run-up to shutting down, AI made losses of Rs 7,365 crore, up 38% from FY18’s Rs 5,337 crore.
