Air India shutdown to have serious impact on economy, says CAPA

The closure of national carrier Air India in the event of another unsuccessful attempt at its privatisation will have a serious impact on the aviation industry and the wider economy, aviation consulting and research firm CAPA India said.

The comments from the research firm comes a day after the minister of state (independent charge) for civil aviation Hardeep Singh Puri told Rajya Sabha during the question hour that the airline will be shut down if not privatised.

"...Airline will have to close down if not privatised," Puri had told Rajya Sabha on November 27.

Privatisation only option for Air India's survival: Government in Parliament

Any further financial support in a mature and competitive aviation market would not be the best use of scarce financial resources of the government. Air India would have a status at par with other designated carriers of India, post-divestment, Puri had added in a written reply to Rajya Sabha on November 27.

CAPA also said that a privatised Air India will be able to become a world-class and structurally viable airline in a period of 3-5 years.

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"India needs a world class @airindiain, which is structurally viable, and is not dependent on taxpayers' funds. It is realistic for a privatised Air India to achieve this within 3-5 years. #IndianAviation," CAPA India tweeted.

The union government has decided to make a second attempt at Air India divestment and has approved a plan to completely exit the airline this time as compared to offering 74 percent stake last year. The government is also brainstorming to reduce the debt burden on the airline as much as possible in order to lure a large number of buyers.