Potential bidders ‘arm twisting’ Govt on Air India sale, reveal Unions
MUMBAI: Alleging that the probable bidders are using "arm twisting tactics" to force the government sell the national carrier for cheap, a forum of 10 Air India unions has said that it will take up the issue with the PMO and the civil aviation ministry, among others.
In a statement issued on Wednesday, the forum also reiterated its opposition to the privatisation of the loss-making airline, saying that "it (Air India) is our national pride and it served the nation many a times in need."
The statement comes following one after another potential bidder opting out of the Air India sale process after the government coming out with the terms of offer in the information memorandum.
"The so-claimed 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 the Air India is sold for a song," the Joint Forum of Air India Unions/guilds/association said in the statement. The forum comprises Air Corporations Employees Union, All India Service Engineers Associations, Air India Employees Union, Aviation Industry Employee Guild, Air India Aircraft Engineers Association, All India Aircraft Engineers Association, Air India Engineers Association, United Air India Officers Association, All India Cabin Crew Association and All India Airline Retired Personnel Association.
On March 28, the civil aviation ministry came out with the preliminary information memorandum on Air India's strategic disinvestment, as per which, the government plans to offload 76 per cent equity share capital of the national carrier as well as transfer the management control.
The proposed transaction would involve Air India, its lowcost arm Air India Express and Air India SATS Airport Services, which is an equal joint venture between the national airline and Singapore-based SATS.
"The joint forum as stated many times has strongly opposed the privatisation of Air India and its subsidiaries as the Air India is our national pride and served the nation many a times at needs," the forum said.
"This statement is issued by the joint forum to safeguard the national interest. A detailed letter in this regard will be sent to the prime minister office, ministry of civil aviation and Air India management," it added.
Budget carrier Indigo, which is struggling with Pratt & Whitney engine issues in its A320 Neo planes, had initially evinced interest in acquiring Air India's international operations, but later backed out, saying such an option was not available under the disinvestment plan.
Days later, Naresh Goyalowned Jet Airways also said it had decided not to participate in the Air India sale process considering the terms of offer in the information memorandum and based on its review.
The forum had held a protest meeting also at the national carrier's Kalina officer here on Tuesday against the government's privatisation move. MUMBAI: After Indigo and Jet Airways opted out from bidding for Air India, it has now been reported that Tata Group might also do the same. According to a report, Tata Group is not happy with the conditions as it thinks they are very unfavourable.
The government in one of its conditions has said that the winning bidder cannot merge the airline with existing businesses as long as the government holds a stake. The winner might also be required to list Air India and would need to abide by conditions designed to safeguard employee interests, restricting its ability to cut staff.
Earlier, the Jet Airways management had held discussions with its alliance partners Air France-klm, Delta, and other investors to put up a proposal. But the airline has now decided to call off its efforts.
“We welcome the government move to privatise Air India. It is a bold step. However, considering the terms of offer in the information memorandum and based on our review, we are not participating in the process,” Jet Airways Deputy Chief Executive Officer Amit Agarwal told the newspaper.
Jet Airways' decision came just four days after Indigo airlines decided to step back from the process, making the Air India's disinvestment process difficult. Befor that, budget carrier Indigo, which had initially evinced interest in acquiring Air India's international operations, said it was not in fray to bid for the national carrier as such option was not available under the disinvestment plan.
“From day one, Indigo has expressed its interest primarily in the acquisition of Air India's international operation and Air India Express. However, that option is not available under the government's current disinvestment plan for Air India.
“Also, as we have communicated before, we do not believe we have the capability to take on the task of acquiring and successfully turning around all of Air India's airline operations,” president and whole time director of Indigo Aditya Ghosh said in a statement.
Indigo, a market leader in the Indian skies with close to 40 per cent share, was one of the first players to show interest in the ailing airline soon after the government gave its in-principal approval last June for the disinvestment of the national career. NEW DELHI: Disinvestmentbound Air India is hoping to garner a revenue of over Rs 90 crore a month from the lucrative New Delhi-san Francisco sector, in which it operates nine flights a week.
The national carrier added three flights on the route on March 25, taking the total number of non-stop services to nine a week. The revenue from the sector was about Rs 60-65 crore per month and and it went up to Rs 71 crore in December last year. The service was launched in December 2015.
"We expect a net addition of Rs 25 crore from this month onwards with the three new services, taking the total number of flights operating on this route to nine (a week)," an airline source said. The source also hinted at augmenting services on other sought-after routes soon.