Loss-making
government carrier Air India [ Images] should be
partly privatised, as private investors would focus on maximising profit and,
in turn, solve the carrier's operational issues, a study commissioned by the
corporate affairs ministry has said.
"Bringing in private players and capital to
operate India's national carrier will help address some of the airline's
operational issues, while freeing government funds for other purposes."
"Partially privatising Air India would
create incentives for the carrier to compete with other airlines, since Air
India's private investors would seek to maximise return on their
investment," said the study report on 'Competitive framework of civil
aviation sector', from the Indian Institute of Corporate Affairs (IICA).
However, Civil Aviation Minister Ajit Singh
recently ruled out any move to privatise Air India, as the government was
pumping in Rs 30,000 for its restructuring.
IICA had nominated Nathan India as consultants
to carry out an analysis on competition-related issues in the civil aviation
sector.
The report pointed out that the Air Corporation
Act 1953 provided a legislative framework within which the government could
provide funds for capital expenditures, as well as potential bailout funds for
the carrier.
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