Government plans to offload 10% in Air India

Government plans to offload 10% in Air India

By siliconindia staff writer   |   Wednesday, 26 January 2005, 08:00 Hrs
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NEW DELHI:The Government will offload up to 10 percent of its stake in the Air-India by the end of this year or early next year to fund for fleet expansion.

Air-India, once one of world most profitable airlines has of late been in the red due to official negligence. A previous privatization effort was abandoned in 2001 due to lack of investor interest.

Aviation Minister Praful Patel said the government planned to sell 10 percent stakes in Air-India and sister firm Indian Airlines Ltd. in IPOs to be completed in the year to March 2006.

"(An initial public offering) is certainly possible, and we are looking at the possibilities of raising the resources and improving their financial health by perhaps going for an IPO at a suitable time," he said.

Air-India has steadily lost market share to foreign airlines over the past decade because of its inability to boost capacity.

It now plans to buy up to 50 planes -- two-thirds of them as firm orders and one-third as options -- as it looks to more than double the size of its fleet of 34 planes by around 2012.

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