India ‘open’ to listing the flag carrier

NEW DELHI: India is open to listing ailing state carrier Air India, according to a government source, after failing to attract buyers for a 76% stake in the company.

“While the government is considering several proposals related to reviving the divestment process, it will not allow complete foreign ownership of the airline,’’ the source said, declining to be named before a final decision is reached.

“One of the proposals could involve the government retaining a share in the debtladen carrier and selling it at a later date so it can capitalise on any financial upside that may occur from listing the airline,’’ the source said.

“The government may also consider reducing the debt it passes on to potential buyers and restructuring the large workforce,’’ another senior government official told Reuters.

“We will take a decision in next few days on changing conditions before inviting fresh bids,” the official said, adding that the government “is committed to selling its stake in the national carrier in the current financial year but could defer it if it fails to get the right price.’’

The government in March finalised plans to divest a majority stake in Air India and offload about $5.1 billion of its debt, but prospective buyers stayed away, with some citing onerous terms as a reason for their lack of interest.

The lack of buyers in a booming aviation market underlines the challenges the government faces in fixing the debt-laden national carrier.

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 Air India’s 27,000 employees, 40% of whom are permanent staff.