The Telegraph
Since 1st March, 1999
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Talks to revive airline selloff

New Delhi, Sept. 27: Civil aviation minister Shahnawaz Hussain will meet disinvestment minister Arun Shourie shortly to discuss the possibility of reviving the selloff proposal for Air-India and Indian Airlines.

“I am not against disinvestment in the two airlines,” Shahnawaz said. “After the September 11 terrorist attack in the US, the situation was not conducive for the disinvestment process. It is improving and I will discuss the issue in view of the present scenario.”

He said the discussions would focus on whether it was feasible to reopen the bidding for the two airlines — a process that was initiated last year but was snarled in controversy over security-related issues and the paucity of bids.

Last year, the government had offered to sell off 26 per cent in Air-India and 40 per cent in Indian Airlines. The Air-India selloff plan came apart when Singapore Airlines, which was partnering the Tatas, pulled out of what was the sole bid for the airline. SIA was upset with the long-drawn process and the fact that it was bidding for a New Zealand airline to increase its presence Down Under.

Similarly, in case of Indian Airlines, the security guidelines framed by the Cabinet Committee on Security (CCS) disqualified the two bidders — Videocon and the Hindujas.

Hussain said the meeting with the disinvestment minister would enable his ministry to chalk out the future plan for acquisition of aircraft and other issues. The minister refused to comment on the report of the NK Singh committee, which has suggested a hike in the FDI limit for aviation from 26 per cent to 49 per cent.

Shahnawaz, who was talking to reporters after the inauguration of the Maharaja Lounge at the Indira Gandhi International airport here today, said the civil aviation ministry would put forth its views on the proposal before the Cabinet meeting.

Hussain said his ministry has also decided on an “open sky policy” for four months from December to March next year in a bid to attract more travellers and increase business.

The arrangement will be in line with the existing policy and the principle of reciprocity. The ministry will be writing to the airlines in western Europe and United States from where the bulk of tourists come. The minister said Pakistan had requested landing rights in India, but said this could be considered only after it granted Indian planes the right to overfly its airspace.

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