Air India stake sale: After Civil Aviation Minister Gajapathi Raju said that no final decision has been made as yet on Air India stake sale as yet, and the government is still mulling on the buyer. The minister notes that unless the management is professionalized, chances of survival for the debt-heavy carrier are low.
Air India stake sale: After Civil Aviation Minister Gajapathi Raju said earlier this month that any ‘unsolicited expression of interest’ in Air India is no longer relevant, even as many airlines are reportedly queuing up to pick up a stake in the state-run carrier, the minister said on Wednesday that no final decision has been made as yet. Addressing a press conference yesterday, Civil Aviation Minister Gajapathi Raju said that while there is no final decision as yet, there are lots of suggestions and the government is still mulling on the issue. “Why not have a share so that if market goes up you can recover,” Gajapathi Raju said adding that such suggestion are welcome.
Earlier this month, Civil Aviation Secretary R N Choubey had said that a foreign company has expressed interest in acquiring up to 49% stake in Air india. Choubey said that the foreign player has shown an “unsolicited expression of interest for AI’s (Air India’s ) airline arm.”
A few foreign airline players are reportedly looking at AI’s disinvestment process with keen enthusiasm. Prominent names include Singapore Airlines and Vistara, who are reportedly in talks with the Indian government to pick up an equity stake in the debt-heavy national carrier.
Mohnish Pabrai, a leading US-based investor opined in an interview with ET Now that a combination of Singapore Airlines and Indigo would bode well for the state-run carrier. “An entity like Singapore Airlines coupled with people like Rakesh Gangwal who used to run United Airlines, used to run Air France and now is the promoter of IndiGo, should be brought together and the magic will happen,” Mohnish Pabrai told the channel recently.
While regulations currently permit 100% foreign direct investment (FDI) into Indian airline companies under the automatic route, the Union Cabinet has drafted different regulations for Air India which allow foreign airlines to invest only up to 49% under the approval route, under the condition that substantial ownership and effective control of Air India shall remain with an Indian National.