Air India may soon get its Maharajah days back

NEW DELHI: After failing to sell a stake in Air India, the government is now working on a four-pronged strategy, including a financial package and a brand-refreshing exercise, to revive the national carrier and make it globally competitive, aviation minister Jayant Sinha told ET.

“What we are working on now is a robust revival plan for Air India that will position it well for being a strong competitor in the future,” Sinha said.

The plan has four elements — a financial package, a refresh strategy (Maharajah Direct), a series of organisational and governance reforms and a plan to strengthen the workforce and motivate them further, the minister said.


“This will enable Air India to become a globally competitive airline,” Sinha said.

The decision to revive the national carrier was taken after the government’s failed attempt to divest a 76% stake in Air India in May.

Sinha said there were two likely reasons for the airline not getting bids – investors were waiting for favourable industry conditions and airlines wanting to become global longhaul carriers not deciding whether they should go ahead on their own or buy out Air India.

“In businesses, there is a decision to be made on make versus buy,” said Sinha.

As part of the revival strategy, the government has already announced that it will transfer loans of Rs 29,000 crore from Air India’s balance sheet to help reduce its interest burden by about Rs 2,700 crore from Rs 4,400 crore per annum. The financial package also has a fresh equity component, for which approval will be sought as part of a supplementary grant in the current session of Parliament.

The Maharajah Direct strategy is an attempt to make Air India the country’s global long-haul carrier supported by a domestic network. The plan is to get “long-haul planes, slots and trained people to run the airline because we have removed the non-core assets from Air India and are left with only the core assets,” Sinha added.

The government plans to hire people from outside to run the airline professionally. The ministry is talking to the Department of Public Enterprise and the finance ministry to secure approvals to allow the airline to hire outsiders in management positions.

The government may still divest its stake in Air India, although for now, that plan has been put on hold as it seeks to strengthen the airline with the revival strategy.