India gives go-ahead to sell government-owned Air India to compete with low-cost rivals

India’s cabinet approved on Wednesday plans to sell a stake in state-run Air India as the debt-saddled carrier struggles to compete with low-cost rivals in one of the world’s fastest-growing airline markets.

Finance Minister Arun Jaitley announced the cabinet had given “in principle approval for the disinvestment” of the flagship carrier, which was nationalised just after India’s independence nearly 70 years ago.

Jaitley will head a group tasked with progressing the sale, including the amount of divestment and other matters related to Air India’s assets, debts and related hotel companies.

Proposals to privatise the airline have been floated by past governments but failed to make any ground. Once the country’s monopoly airline, Air India has slowly lost market share to new private players, especially low-cost carriers.

Passengers tired of delays, cancelled flights and a generally poor service record have flocked to a suite of new competitors offering cheaper and more reliable routes in India’s booming aviation market.