Global aviation consultancy firm CAPA has termed the government’s decision to sell 100 per cent stake in Air India a “bold reform” and said it expects “significant” response from the prospective bidders. “The Centre for Asia Pacific Aviation (CAPA) expects significant response (to Air India’s stake sale) as the offer structured by the government is attractive,” CAPA India chief Kapil Kaul told PTI on Monday.
He said the time given for due diligence and submitting bids is also reasonable. The government on Monday announced sale of 100 per cent stake in debt-laden Air India as it issued the preliminary bid document for the strategic disinvestment and has set March 17, as the deadline for submitting expression of interest.
As part of the strategic disinvestment, Air India would also sell 100 per cent stake in low-cost airline Air India Express and 50 per cent shareholding in joint venture AISATS, according to a bid document issued on Monday. The airline’s management control would also be transferred to the successful bidder.
This is the second time in less than two years that the government has come out with proposal for selling stake in Air India, which has been in the red for long. The government has set March 17 as the deadline for submitting the expression of interest. AISATS is an equal joint venture between Air India and Singapore Airlines. It offers ground-handling services.
“Clean exit by the government and entire non-aircraft-related debts taken out of AI (Air India) balance sheet, particularly as entire debt excluding aircraft is taken out and this signals a determined effort to exit Air India to allow taxpayers funds be utilised for social agenda of the government,” he said.
Noting that this may be the single-biggest write-off by the government but for the right reasons, Kaul said, “CAPA see this as a very bold reform.”