Centre offers to sell Air India
New Delhi: Moving forward with Air India stake sale process for the second time in less than two years, the government on Monday issued the preliminary bid document for 100 per cent stake in the airline along with fixing the debt amount for prospective bidders. Air India would sell its cent per cent stake in profit-making budget carrier Air India Express and 50 per cent stake Air India SATS Airport Services.
Making a second attempt to sell off debt-laden Air India, the government on Monday approved 100 per cent stake sale in the national carrier, in place of 76 per cent earlier, and set March 17 as the deadline for receiving expression of interest from suitors.
Announcing this, the minister of state for civil aviation, Mr Hardeep Singh Puri, said all employees of the airlines will go to the new management and the new company will have to retain the Air India brand. Also, substantial ownership and effective control of the airline must remain with an Indian entity, he said.
The buyer would have to offer 3 per cent equity shares of the airline to the permanent employees of Air India as employee stock option. Air India has about 9,400 permanent employees and 3,600 fixedterm contract staff, including 1,850 pilots and 4,600 cabin crew.
The minister said the government has approved the release of preliminary information memorandum (PIM) for inviting expression of interest from bidders for the `strategic disinvestment’ of the airlines and unlike in 2018, when the government had proposed to offload 76 per cent equity share capital, this time the entire government stake in the carrier would be offered.
The whole disinvestment process is looked after by the Air India Specific Alternative Mechanism, headed by the home minister, Mr Amit Shah, and having ministers of commerce and industry, finance and corporate affairs and civil aviation as members.
While pointing out that Air India has coverage of 98 destinations, with 56 domestic and 42 international destinations, and a passenger load of roughly 26 million during 2018-19, Mr Puri said that even after infusion of about Rs.30,500 crore as per the
Turn Around Plan 2012, Air India has running into losses after year.
“Due to its accumulated debt of about Rs 60,000 crore, its financial position is in a very fragile condition and Air India is currently under a debt trap. Any private investor can turn it around and make Air India a profitable venture by bringing operational as well as financial efficiencies,” the minister said.
He added that the government has limited financial resources whereas the private investor can bring the required capital for its turnaround.
After drawing a blank during the government’s first attempt to sell the airline in 2018, the minister said lessons have been learnt and critical areas have been analysed to make the current disinvestment bid more attractive. Among the key decisive parameters in the current PIM include decision to transfer of management control and sale of 100 per cent shares of Air India along with Air India’s 100 per cent stake in its subsidiary, Air India Express Limited, and 50 per cent stake in joint venture, AISATS. since been year