Air India stake sale: Even as the domestic carriers IndiGo, Spicejet and Jet Airways have pulled out of Air India stake sale, RSS chief Mohan Bhagwat says that the government shouldn’t allow foreigners to take control of state-run carrier Air India. Speaking at a BSE event yesterday, Mohan Bhagwat said, “If Air India has not been run properly, then give it to those who would be able to run it properly. He should be an Indian as you should not let your skies be controlled by someone else.”
Bhagwat then gave the example of Germany or Russia , saying that the countries don’t allow a majority shareholding in the company, capping the holding at 39-49%. Interestingly, the government is looking to sell a 76% stake in the debt ridden carrier. Under the currently applicable foreign direct investment (FDI) rules, no foreign airline can own more than 49% in Air India, while they can own up to 100% of any Indian carrier.
Bhagwat’s comments come at a time when foreign airlines such as British Airways, Etihad, Lufthansa and Singapore Airlines have reportedly shown interest in the state-run carrier. In his address Bhagwat noted that while Air India has losses, it has various tangible as well as intangible assets. “Yes it has losses, but it has got landing rights to so many countries. It has so many assets, it has got trained staff. It has got tangible and intangible assets,” he said.
Notably, debt as well as labour5 are seen to be two key reasons why domestic airlines have ruled themselves out of the race to bid for the state-run Air India. “The way the deal has been structured, its not attractive given the debt and people issues. There are other things, the brand has to be retained, a forced IPO etc, which pose uncertainty. These are things which bidders find very onerous.” Amber Dubey, head -Aerospace and Defence, KPMG India told in a recent interview with CNBC TV-18.
Apart from Air India stake sale, Bhagwat also spoke about cashless economy saying that such a system should be inclusive. “If you bring a cashless system, it does not work because not everyone uses the cashless system in our country,” he said.
Source: Financial Express