(LiveMint)
India plans to split Air India in a bid to entice investors to buy the loss-making airline that has a debt burden of more than $7 billion. The Narendra Modi government has agreed to sell 76% of Air India Ltd, according to a government statement on Wednesday. The budget carrier of the airline, Air India Express, will be completely sold, while the state will offer half of the ground-handling unit—Air India SATS Airport Services—separately, according to the statement.
A successful Air India sale—surviving on taxpayer-funded bailouts, has five subsidiaries and a joint venture, and a combined workforce of as many as 27,000—is crucial for Modi, who wants to showcase his credentials as a reformist attempting to steer the government away from running businesses. The funds saved can help the government bolster its finances and boost spending on health and education.
