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No investors to buy Air India

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Government decision to go for selling stake in Air India has failed, as there was no single bidder for this by the Thursday deadline, underlining the challenges it faces in fixing the debt-laden state carrier. Sources says,  the initial plan of the government, meeting held in March to divest a 76 percent stake in Air India and offload about $5.1 billion of its debt.

 

Air India, known for its Maharaja mascot, has some of India‘s most lucrative international and domestic landing and parking slots that are key for airlines. While a buyer would have got management control and gained access to more than 2,500 international slots and over 3,700 domestic slots, it would also have been required to take on AirIndia‘s 27,000 employees, 40 percent of whom are permanent staff. The terms had also stipulated that the government would have continued to hold a 24 percent stake, with the need for the bidder to abide by conditions, not yet detailed, designed to safeguard employee interests. The government had also restricted merging the airline with the buyer’s existing businesses, but later relaxed the rule to allow some integration for business efficiency.

 

The Ministry of Civil Aviation said on Twitter on Thursday evening that it had received no bids, adding its next move on the stake sale would be decided “appropriately”. R.N. Choubey, Secterary,Civil aviation said on Wednesday the government was unlikely to further extend the May 31 deadline.

 

Largest airlines including India‘s IndiGo, Jet Airways and Tata Group had also decided not to bid as the Governments  terms were too onerous. Hope there will be change in the bidding plan to attract certain International investors about Air India.

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