New bid to find buyer for Air India slammed as ‘selling family silver’

An Air India Airbus A320neo plane takes off in Colomiers near Toulouse, France. (Reuters)
Updated 28 January 2020

New bid to find buyer for Air India slammed as ‘selling family silver’

  • Indian government aims to offload entire stake in debt-ridden national carrier after failed 2018 sale attempt
  • Critics blame country’s struggling economy for decision to sell airline

NEW DELHI: Renewed government attempts to find a buyer for “debt trap” national carrier, Air India, have been slammed as “selling the family silver.”

Politicians from opposition and pro-government parties condemned the move by the Indian government to offload its entire stake in the flag-carrier airline, which comes more than a year after a failed bid to sell a controlling share.

A document released on Monday said that any bidder would have to absorb around $3.3 billion of debt along with other liabilities.

Speaking in New Delhi on Tuesday, Kapil Sibal, senior leader of India’s main opposition party, the Indian National Congress, said: “When governments don’t have money this is what they do.

“The government of India has no money; growth is less than 5 percent and millions of rupees are outstanding under several social schemes. This is what they will do, sell all the valuable assets we have.”

Derek O’Brien of the Trinamool Congress, the regional party ruling West Bengal, said in a video statement that “the government has decided to sell more family silver by selling 100 percent stake in Air India. You can well imagine how bad the economy (is).”

And on Twitter, Subramanian Swamy, parliamentarian from the ruling Bharatiya Janata Party (BJP), said: “This deal is wholly anti-national, and I will (be) forced to go to court. We cannot sell our family silver.”

Monday’s document gave the deadline for submission of initial expressions of interest in purchasing the airline as March 17. In 2018, the Indian government tried to sell 76 percent of the carrier but got no takers.

To justify the latest sale attempt, Aviation Minister Hardeep Singh Puri, said: “Despite infusing 30,500 crore rupees ($4.3 billion) in AI (Air India) since 2012, the airline has been running into losses year after year. Due to its accumulated debt of about 60,000 crore rupees, its financial position is very fragile.”

He described the company as being in a “debt trap” but added that it could be saved through privatization. “We have learnt lessons from the 2018 bid.”

Referring to critical comments from fellow BJP members, the minister said they were expressing their “personal opinion.”

Jitender Bhargava, former executive director of corporate communication at Air India, said the current offer would attract potential buyers.

“India is a growth market, so anybody would like to be part of it and take the advantage. The acquisition of Air India provides the fastest way to become a global carrier,” he told Arab News.

According to Bhargava, the move had nothing to do with the current state of the Indian economy. “All the important international carriers want to expand their footprints in India because of the potential of the Indian market. The government has taken a pragmatic view on the sale of the national carrier,” he said.

“Ownership of the airline does not matter, leadership matters. Once it came into the hands of the government, bureaucracy killed it,” added Bhargava, who authored “The Descent of Air India” chronicling the airline’s downfall. “Air India under the government’s ownership cannot run, cannot survive.”

He predicted that the carrier would become a marginal player if there was no change in ownership.

Air India has a fleet of 146 aircraft and employs around 21,000 people. It was founded by prominent industrialist J.R.D. Tata in 1932 and nationalized in 1953.


Japan to declare coronavirus emergency, launch $990 billion stimulus

Updated 06 April 2020

Japan to declare coronavirus emergency, launch $990 billion stimulus

  • More than 3,500 people have tested positive for the coronavirus in Japan and 85 have died
  • Numbers keep rising with particular alarm over the spread in Tokyo, which has more than 1,000 cases

TOKYO: Japan is to impose a state of emergency in Tokyo and six other prefectures as early as Tuesday to try to stop the coronavirus, the prime minister said, with the government preparing a $990 billion stimulus package to soften the economic blow.
More than 3,500 people have tested positive for the coronavirus in Japan and 85 have died — not a huge outbreak compared with some hot spots. But the numbers keep rising with particular alarm over the spread in Tokyo, which has more than 1,000 cases, including 83 new ones on Monday.
“Given the state of crisis on the medical front, the government was advised to prepare to declare the state of emergency,” Prime Minister Shinzo Abe told reporters.
An emergency, which Abe said would last about a month, will give governors authority to call on people to stay at home and businesses to close, but will not be as restrictive as lockdowns in some other countries.
In most cases, there will be no penalties for ignoring requests to stay at home, and enforcement will rely more on peer pressure and respect for authority.
Pressure had been mounting on the government to take the step although Abe had voiced concern about being too hasty, given the restrictions on movement and businesses it would entail.
Abe also said the government has decided to launch a stimulus package of about 108 trillion yen, including more than 6 trillion yen for cash payouts to households and small businesses and 26 trillion yen to allow deferred social security and tax payments.
It was not immediately clear how much of that package would be new government spending.
“The government wants to help businesses continue and protect jobs,” Abe said.
An emergency appears to have public support. In a poll published on Monday by JNN, run by broadcaster TBS, 80 percent of those surveyed said Abe should declare it while 12 percent said it was not necessary. His approval rating fell by 5.7 points from last month to 43.2 percent, the survey showed.
But Kenji Shibuya, director of the Institute for Public Health at King’s College, London, said the emergency was too late given the explosive increase in cases in Tokyo.
“It should have been declared by April 1 at the latest,” he said.
Sounding an alarm over the high rate of cases that could not be traced, Tokyo Governor Yuriko Koike indicated last week that she would favor a state of emergency as a way to help her urge residents to abide by stronger social-distancing measures.
An expert on the government’s coronavirus panel said Japan could avoid an explosive rise by reducing person-to-person contact by 80 percent.
Under a law revised in March to cover the coronavirus, the prime minister can declare a state of emergency if the disease poses a “grave danger” to lives and if its rapid spread could have a big impact on the economy.
Economy Minister Yasutoshi Nishimura called for calm saying there was no need for people in designated prefectures to flee to other regions, which could spread infections, NHK reported.
While Japan’s coronavirus epidemic is dwarfed by the 335,000 infections and more than 9,500 deaths in the United States alone, experts worry a sudden surge could overwhelm Japan’s medical system.
Abe must seek formal advice from a panel of experts before deciding to go ahead and declare the emergency.
Governors in Tokyo and elsewhere have asked citizens to stay home on weekends, avoid crowds and evening outings, and work from home. That has had some effect, but not as much as many experts said was needed.