Air India disinvestment: As the state-run carrier draws a blank, with even potential bidders IndiGo and Tata Group staying away, here's what the government is planning to do next
Air India disinvestment: As the clock ticked towards the Air India stake sale deadline on Thursday evening, it became clearer that the debt-ridden has found no buyers. The news was confirmed after the 5 pm deadline passed and the civil aviation ministry tweeted: No bids were received for Air India disinvestment. “There would be a rethink on existing architecture, terms and strategy,” CNBC-TV18 quoted Aviation Secretary R N Choubey as saying.
“The process now involves going to the evaluation committee and core group… the government will take the decision after that,” the aviation secretary said, adding, the government is looking forward for a better alternative mechanism. The state-run carrier drew a blank, with even potential bidders IndiGo and Tata Group staying away.
The aviation secretary reiterated that the government has no intention of controlling the airline and is no in a now in a better position to understand what the market wants. The government planned to sell up to 74% stake in the carrier, and the divestment would include profit-making Air India Express and joint venture AISATS, an equal joint venture between the national carrier and Singapore-based SATS.
Air India has long been a mascot for brand India, but by 2009 the state-run carrier began reeling under a huge pile of debt and its services started deteriorating. As the national carrier, Air India slowly turned into a taxpayer-money guzzling machine ridden with inefficiencies and mismanagement, after which the Union Cabinet headed by Prime Minister Narendra Modi, approved disinvestment of this debt-laden air carrier.
In January, the Cabinet approved the foreign direct investment of up to 49% under approval route in Air India in a bid to expand the scope of disinvestment of the national carrier to not only domestic players, but to foreign players as well.
While IndiGo had earlier shown interest in the foreign operations of Air India the firm had recently said that Aditya Ghosh said in a recent statement that IndiGo may not have the capability to take on the task of acquiring and successfully turning around all of Air India’s airline operations.