Air India Sale to Close by Sept; Govt Initiates Allure for Financial Bids

By siliconindia  |  Wednesday, 14 April 2021, 01:00:21 PM IST

Air India Sale to Close by Sept; Govt Initiates Allure for Financial Bids

The government begins the process of alluring financial bids for the sale of national carrier Air India. However, this deal is likely to close by September, states the sources.

Tata Group was one amongst the multiple entities that had put in preliminary bids to buy the loss-making Air India in December 2020. However, the government is selling its whole 100 percent stake in Air India that has been in losses since its merger with domestic operator Indian Airlines in 2007.

But, the stake sale process however got delayed due to the COVID pandemic and the government had extended five times the deadline to put down the preliminary bids for the national carrier.

The airline, which started its journey as a mail carrier in 1932, would give a successful bidder control of 4,400 domestic and 1,800 international landing and parking slots at domestic airports, as well as 900 slots at airports overseas.

Alongside, the bidder would also get 100 percent of the low-cost arm Air India Express and 50 percent of AISATS that offers cargo and ground handling services at major Indian airports.

Having faced several failed attempts since 2017, government had this time sweetened the deal by offering freedom to potential suitors to decide how much of the airline's debt they want to take on as part of the transaction. Formerly, the bidders had to take over the entire 60,074 crore debt.

Lately, Civil Aviation Minister Hardeep Singh Puri stated that the government may keep Air India running till it gets divested and there is no choice left but to either "privatise or close" the debt-laden airline.

Hardeep Singh says, "We are looking at another timeline now, what is called data room for prospective bidders to look at... that is opened up, 64 days for the financial bids to come in. After that it is the question of taking a decision and handing over the airline."

He continues, "...There is no choice, we either privatise or we close the airline. We run a loss of  20 crore every day despite Air India making money now. Because the mismanagement has resulted in a cumulative debt of 60,000 crore."

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