NEW DELHI: The government has initiated the process for inviting financial bids for cash-strapped Air India and expects to conclude the sale of the national carrier by September this year. According to people familiar with the development, the transaction to privatise Air India has moved to the financial bids stage and eligible bidders were given access to the Virtual Data Room (VDR) of Air India after analysing the preliminary bids.
As of now, Tata Group and SpiceJet Chairman Ajay Singh have reportedly been shortlisted to bid for the carrier. It is learnt that the shortlisted entities will be given time till early July to make their financial bid and then it may take another 3-4 months to finally close the sale of the ailing airline, which started as a mail carrier in 1932.The disinvestment of Air India has already been delayed multiple times due to Covid-19 pandemic. The government had earlier targeted to sell the loss-making carrier before March 2021 to achieve its divestment target of FY21.
Earlier in March, Union civil aviation minister Hardeep Singh Puri had said that there is no choice but to either “privatise or close” the debt-laden airline, but the government will keep Air India running till it gets divested. “We run a loss of Rs 20 crore every day despite Air India making money now. Because the mismanagement has resulted in a cumulative debt of Rs 60,000 crore,” he had saidWith previous attempts since 2017 failing to get significant interest, the government had this time sweetened the deal. It is selling its entire 100 per cent stake in Air India.
Besides, the owners would get 100 per cent of the low-cost arm Air India Express and 50 per cent of AISATS, which provides cargo and ground handling services at major Indian airports. The government has also given the freedom to potential suitors to decide how much of the airline’s debt they want to take on as part of the transaction. Previously, the bidders were required to take over the entire debt. That apart, the successful bidder will get control of 4,400 domestic and 1,800 international landing and parking slots at domestic airports, as well as 900 slots at airports overseas.