The government wants to exit fully from Air India as it embarks on another effort after a plan to sell a 76% stake last year failed.

Air India has debt of about Rs 31,000 crore after the government took over Rs 29,000 crore off its books, thus reducing the airline’s interest burden by Rs 2,400 crore to Rs 1,700 crore annually.

Hardeep Singh Puri, Civil Aviation Minister | Companies | Business | DKODING

However, oil marketing companies last week stopped fuel supplies to the Air India Group at six airports because of dues of about Rs 5,000 crore, mainly affecting operations of the Alliance Air unit.

The issue is expected to be resolved soon with the help of equity support from the government.

“I believe the government should not be in the business of running airlines… and believe the government should completely exit Air India,” aviation minister Hardeep Singh Puri said.

Air India to undergo total privatisation: Hardeep Singh Puri https://t.co/HzVC8KXGT2 — Republic (@republic) August 29, 2019

“There are many who are very interested in the airline and the one who gets the airline will be very fortunate.” Puri added.

Puri said the so-called alternative mechanism, a panel headed by home minister Amit Shah, will meet soon to finalise the asset-sale plan. “The details are being finalised.”

“The committee headed by the cabinet secretary will look into it first and then the alternative mechanism will clear it,” he added.

Last time around, the government sought to offload a 76% stake and retain the rest to be sold at a premium later, but there were no takers.

Tata Group is also in the race

The government is more optimistic this time as the grounding of Jet Airways makes Air India a more attractive proposition for any entity seeking to take advantage of demand in the world’s second-most populous nation.

Big corporate houses such as the Tata Group, which did not bid for Air India last time, are keeping their options open.

Qatar Airways group CEO Akbar Al Baker had said after the Air India divestment failed last year that he would be open to buying the national carrier and that the debt of the airline was not worrisome.

But he would not want its units such as ground handling and engineering, which the government plans to sell separately.