‘Air India divestment process looks very uncertain amid Corona crisis’

MUMBAI: The disinvestment process for national carrier Air India looks “very uncertain” in the wake of the Coronavirus pandemic that has impacted the aviation sector the most globally, according to rating agency Crisil.

In another attempt to sell loss-making Air India, the government, in January this year, sought Expression of Interest (EOI) and the deadline for submission of EOI has now been extended till June 30.

Initially, the deadline was March 17 and was first extended till April 30.

“With the current kind of environment, for people to bid for a known airline like Air India and the kind of commitment that they would have to make, it looks very uncertain that their process can go through in the current scheme of things,” Jagannarayan Padmanabhan, Director and Practice Leader (Transport and Logistics) at Crisil Infrastructure Advisory said on Thursday.

However, Crisil expects mergers and acquisitions of airlines in the face of the losses that the domestic carriers are estimated to suffer in the current situation.

“The EOI might have been issued but in the current situation, airlines are unlikely to take up any new assets on its books.” he said.“the Air India part of privatisation will have to wait for its turn. What is the timeline, I don’t know as of now. But the current environment may not be the best time to go through (the sale process),” Padmanabhan said. In 2018, the government’s efforts to divest Air India failed to take off.

At that time, 76 per cent stake in the airline was to be sold.

Under the current disinvestment plan, the government has proposed to sell 100 per cent stake in the airline along with entire shareholding in AI Express and 50 per cent in ground handling joint venture — Air INDIA-SATS.