NE BUSINESS BUREAU
MUMBAI, JAN 27
The government said on Monday it plans to sell its entire stake in Air India, in a revised push to sell its national carrier after an initial attempt to sell a majority stake in the airline failed to draw a single bid in 2018.
A document inviting expressions of interest in Air India, released on Monday, said India would sell a 100% stake in the carrier, which operates both domestic and international routes. The document set March 17 as the deadline for submissions of initial expressions of interest and said any bidder would have to agree to assume roughly $3.26 billion in debt, along with other liabilities.
India said that substantial ownership and effective control of Air India would have to remain vested with an Indian entity following the sale, limiting the scope of any foreign bidders interested in the asset
In 2018, India had tried to sell a 76% stake in Air India and offload about $5.1 billion of its debt, terms that potential buyers at the time viewed as too onerous
Air India, known for its Maharaja mascot, has some of India’s most lucrative international and domestic landing and parking slots that are key for airlines. Courtesy: Reuters
Buyer will get an airline with a massive reach: MD
Earlier in an exclusive interview to NDTV, Air India Chairman and Managing Director Ashwani Lohani on January 23, 2020 said that prospective buyers of the state-run carrier will “get an airline with a massive reach”. Comments from the top bureaucrat come within two months after the government said the airline will have to shut shop if not privatized. “Someone who buys Air India will get an airline with a massive reach, an airline which is a very big brand… I say It is the biggest brand of India and everyone in the world knows about Air India,” Mr Lohani said. Last year, the government failed to attract any bidders when it tried to sell a 76 per cent stake in the ailing carrier.
Calling Air India a viable option for a buyer, Mr Lohani said, “Since April 1, 2019 till now we have either launched or announced 12 new international flights that is a big achievement… even for a constrained airline like Air India.”
He also emphasized on the position of the airline in terms of international travel, adding that 65-70 per cent of its revenue comes from international operations.
“We are the country’s biggest international airline. As far as international travel is concerned our market shares is about 18 per cent, we fly direct flights to 43 destinations we have a lot of strength because we have got a very vast expanse internationally and domestically also Air India flies to 80 destinations, Mr Lohani said.
If I wasn’t a Minister, I would be bidding for AI, Goyal
If I wasn’t a minister today, I would be bidding for Air India. It has some of the best bilaterals the world over… a well managed and efficient Air India with lot more good aircraft put in using these bilaterals is nothing short of a gold mine to my mind, Mr Goyal told reporters at Lavos last week.