An Air India aircraft. Photo: AFP
Many of Air India's aircraft have been sitting idle because of Covid-19 flight restrictions. Photo: AFP

The Modi government has reiterated its commitment to sell state-owned airline Air India, while admitting that present market conditions were not conducive. In the meantime it wants to focus on improving its functioning and retain its market share.

The government’s recent effort to sell its 76% stake in the carrier did not elicit any response from private parties, dealing a blow to Prime Minister Narendra Modi’s bid to for offload stakes in loss-making government entities.

Civil Aviation Minister Jayant Sinha blamed high fuel prices and a weak rupee for the lack of interest among bidders for Air India but said the ministry would revive the process when the conditions are favorable again, the Financial Express reported.

The ministry has directed the Air India board to draw up a fresh plan for efficient functioning. The minister claimed Air India was making profits at an operating level and its losses were due to “legacy issues of the previous government”, the daily said.

In May, Air India’s domestic market share stood at 12.8%, according to the aviation regulator. The airline’s operating profit more than doubled in Fiscal Year 2017 to 2.98 billion rupees, but its net loss widened to 57.65 billion rupees in the same period.

Air India employs 27,000 people and has one of the industry’s highest employees-per-aircraft ratios. It operates a fleet of 142 aircraft, including 65 Airbus 320s, 15 Boeing 777s and 24 Boeing 787s.

Selling the state carrier was seen as key to the government’s plans to divest assets and helping to keep the fiscal deficit at 3.3% of GDP. However, critics said the sale fell through because the government chose to retain a 24% stake in the airline. Instead, it should have sold the whole airline, they said.