Sale of debt-laden Air India fails to take off

MUMbAi: The Indian government’s attempt to sell debt-laden national carrier Air India is in danger of hitting the skids as a key deadline looms with no bidder in sight.

Prime Minister Narendra Modi’s administration announced in March that it would privatise the beleaguered airline.

But the plan has struggled to get off the ground with several prospective buyers ruling themselves out.

“Conditions put forth by the government with regards to debt and employee costs are restrictive and have put off investors,” avia- tion expert Amrit Pandurangi told AFP.

“The government needs to address the concerns of the private investors if the stake sale is to move forward,” the independent analyst added.

Air India, founded in 1932, was once the country’s monopoly airline, known affectionately as the “Maharaja of the skies”.

But it has been haemorrhaging money for years as it has slowly lost market share to low-cost private players in one of the world’s fastest-growing airline markets.

Successive governments pumped in bil- lions of dollars to keep it afloat before Modi’s cabinet last year gave the go-ahead to start the process of selling the flagship carrier.

The government wants to sell a 76% stake in the 86-year-old airline and offload US$5.1bil of its debt in what would be one of India’s biggest ever divestments.

However the proposal has failed to fly with several major airlines, including IndiGo, now India’s number-one airline, and Jet Airways, which said last month they were out of the running after reviewing government bid documents.