Air India stake sale: Even as prominent domestic businesses from IndiGo, Jet Airways and even Tata Group have pulled out of the race to bid for Air India, foreign airlines British Airways Etihad, Lufthansa and Singapore Airlines have shown interest in the state-run carrier. According to ET Now, Etihad Airways, UAE’s second-largest airline, is reportedly planning to bid for the debt-laden carrier and has initiated discussion with Reliance Anil Dhirubhai Ambani Group. Earlier, Business Standard has also reported a source as saying that Etihad is scouting for partners to form a consortium to bid for Air India and is in discussion with companies, including the Anil Ambani group.
Apart from Etihad, Singapore Airlines, Lufthansa and International Airlines Group, the owner of British Airways, have also shown interest in bidding for Air India, reported ET Now. Notably, Etihad currently owns 24% of Indian carrier Jet Airways, which has explicitly pulled out of the race to bid for Air India. Jet Airways’ deputy chief executive officer Amit Agarwal told PTI that while it’s a bold step by the government to divest stake in Air India, considering the terms of offer in the information memorandum and based on its review, Jet Airways will not be participating in the process.
While Reuters had earlier reported that Tata Group will not be bidding for Air india due to onerous terms and conditions, N Chandrasekaran, Chairman of Tata Sons told CNBC TV18 that any decision to bid for Air India will be made by the middle of May.”There is a deadline which extends till, I think, middle of May, so I will leave it at that,” he told the channel.
While these foreign carriers seem interested in buying a stake, the domestic carriers have stayed away due to various reasons including the debt and labour. Sharing reasons as to why potential bidders have ruled themselves out, Amber Dubey, head -Aerospace and Defence, KPMG India told CNBC TV18, “The way the deal has been structured, its not attractive given the debt and people issues.” Further, other terms such as that the brand has to be retained a forced IPO etc, pose uncertainty, he said. “Nobody in India can take up Rs 33,000 crore additional debt. Nobody wants to take 10-15,000 additional people,” he told the channel.