Air India– once the national carrier of India is counting its last few days in doldrums, as with approaching September 15, the final bidders will submit their bids and this will mark the completion of the most crucial stage in the direction of Air India privatisation. For the last 18 months or so, Air India has been in the media for one reason or another, but primarily it was about its sale that the entire India and the business sector was looking up to. Divesting Air India entails the government selling off its 100 per cent stake in the state-owned airline that is incurring losses since 2007. The government, as part of the exercise, also plans to sell its entire stake in Air India Express and 50 per cent stake in Air India SATS Airport Services Private Ltd.
Who All Are the Bidders Now?
Initially, when Expression of Interests were invited, at that time, four bidders were in the fray that included Tata Sons, another consortium of some AI employees and Interups, and Spicejet. So in total, four groups formally submitted an ‘Expression of Interest,’ kicking off the race. Soon after, this list was narrowed further when one employee group pulled out of the race, and another was ruled ineligible in March. Now only the Tata Group and Spicejet CEO Ajay Singh are in the race to take over India’s beleaguered national carrier Air India. During the phase of inviting biddings, there were rumours that Adani and Hinduja groups were planning to participate in the Air India bids.
Why Tata and Spicejet Want To Buy Air India?
Ever since the government invited expression of interest for the privatisation of Air India, many corporates showed interest in getting control of Air India. This may sound strange that why corporations are interested in buying an airline carrier which is under huge debt. So the answer to this question lies in numbers, So the one who will get control over Air India, will automatically get control of 4,400 domestic and 1,800 international landing and parking slots at domestic airports, as well as 900 slots at airports overseas. In addition to this, the bidder would also get 100 per cent of the low-cost arm Air India Express and 50 per cent of AISATS, which provides cargo and ground handling services at major Indian airports.
By When Can We Expect the Privatisation of Air India To Be Completed?
With the aim of achieving almost 1.75 trillion divestment target announced by the government in the Union Budget of 2021-2020, the government is sticking to the timeline and has said that the privatisation of the national carrier will be completed in FY22. Also, the deadline for the final bids to be submitted is on September 15.
Who Will Become The Boss of Air India?
Now, who will become the boss of Air India depends on the bidding, as the government in last October decided to do bidding on the enterprise value of the company that includes short-term and long-term debt as well as any cash on the company’s balance sheet. So whose bid will be on the higher side will get the control of Air India.
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