‘Potential buyers are arm-twisting govt’
A few European and American carriers could be interested in acquiring a stake in Air India to fend off competition from the West Asian carriers, said Mark Martin, founder and chief executive officer of Martin Consulting, a Dubai-based aviation consulting firm.
“Star Alliance members like Lufthansa, Singapore Airlines, Air China, Air Canada and United Airlines will gain immensely if they were to pick up stake in Air India,” Martin said, adding that it makes strategic sense for these airlines to buy a stake in Air India as the national carrier is sitting on lucrative bilateral deals including ones to Gulf countries.
However, Martin added that these carriers may not be interested in Air India since European airlines are trying to keep their operating costs low on the back of rising oil prices while American carriers are predominantly focused on expanding in their own market.
An industry expert on the condition of anonymity said that the government, which expects to sell Air India by end of March 2019, will find it impossible to do so. “It will take at least two years for such a complex deal to get through,” the expert said. NEWDELHI: A joint forum of 10 Air India employees’ unions on Wednesday said potential buyers are “arm-twisting” the government to change its terms and conditions for divestment of the debtridden airline.
Jet Airways and rival Indigo, two of India’s top private airlines, publicly opted out of the race after the government stipulated that the winning bidder cannot merge the airline with existing businesses as long as the government holds a stake. The government also said control of the airline will vest with Indian entities and the brand name Air India has to be retained.
The government plans to divest a 76% stake in Air India and offload about ₹510-crore of its debt.
“We apprehend from different news appearing in the media about the interested parties projecting as probable bidders and the statement(s) thereof appears to be intended to degrade and devaluate Air India,” the joint forum said in the statement.
“The so-called probable buyers are using arm-twisting tactics so as to put pressure on the government to succumb to change the terms and conditions best suited to them and Air India is sold for a song,” it added.
In addition to the 76% stake, the government is also selling all of Air India’s low-cost arm—air India Express—and 50% in the airline’s baggage handling and airport services unit.
Out of the 24% stake, the government will offer employees stock options to employees. The civil aviation ministry has invited expressions of interest by May 14.
Air India has an estimated 27,000 employees, 40% of which are permanent staff.
The forum has also said that a detailed letter will be sent to the Prime Minister’s Office, ministry of civil aviation and Air India management.