After Indigo, Jet Airways opts out of bid to buy Air India stake
NEW DELHI/MUMBAI: Jet Airways said on Tuesday it will not participate in the Air India disinvestment process, making it the second domestic airline to back out of the bidding process.
The government has presented a detailed preliminary information memorandum, detailing plans to offload up to 76% stake in Air India. It plans to transfer the airline’s management control to private players. Out of the 24% stake the government will be left with in Air India, it will offer stock options to the airline’s employees.
“We welcome the government move to privatise Air India. It is a bold step. However, considering the terms of offer in the information memorandum and based on our review, we are not participating in the process,” Amit Agarwal, deputy CEO and CFO of Jet Airways said in a written statement.
The airline did not give a reason behind the decision to pull out of the bidding process.
The government plans to sell stakes in the loss-making airline on the condition that its control will rest with Indian entities and the brand name Air India is retained. The government will also sell 100% of its low-cost international carrier Air India Express Ltd and a 50% stake in Air India SATS Airport Services Pvt. Ltd, an airport ground-handling joint venture.
India’s largest domestic carrier Indigo, first off the blocks in announcing its interest in the process, earlier all but withdrew from the race after the government put out details of the proposed sale.
“As we have communicated before, we do not believe that we have the capability to take on the task of acquiring and successfully turning around all of Air India’s airline operations,” Aditya Ghosh, president and whole-time director at InterGlobe Aviation Ltd, the company behind Indigo, said in a statement.
The civil aviation ministry has invited expressions of interest from interested parties by 5pm on May 14. The sale will help the government achieve its ambitious Rs 80,000 crore disinvestment target for 2018-19.