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Part of Air India for Sale

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India’s government may sell up to 10% of Air India to aid expansion so they can stay competitive.

“(An initial public offering) is certainly possible, and we are looking at the possibilities of raising the resources and improving their financial health by perhaps going for an IPO at a suitable time,” said India civil aviation ministry official, Ajay Prasad.

“We are planning a partial sale in a phased manner which we will hope will come to the market by the end of the year. This is a way of raising funds to strengthen the airline and make it globally competitive,” said Praful Patel, India’s aviation minister.

Air India plans to expand its fleet to 50 aircraft, almost double the size of an expansion plan mooted last year. That plan was estimated to cost about Rs100bn ($2.2bn). But Jitender Bhargava, a company spokesman, said that the new fleet acquisition could cost “twice as much”.

“What we are going to need represents a dramatic difference to what we had in the past. Air India has to grow [faster] than the market,” said Mr Bhargava.

Air India’s fleet, which has an average age of 21 years, could more than double in size by 2012. The first new aircraft could be delivered by the middle of 2006.

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Part of Air India for Sale
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