Image: Sattish Bate / Hindustan Times via Getty Images
The government in April began proceedings to sell 76 percent stake in the country’s debt-laden national carrier, Air India. It sought a formal expression of interest from private companies in buying the 87-year-old airline that is saddled with a ₹50,000 crore-plus debt. However, despite the early enthusiasm, the sale seems to be hitting a roadblock. So far, the country’s biggest (IndiGo) and second-biggest airline (Jet Airways) by market share have withdrawn from the race.
Much of the roadblock seems to have stemmed from the conditions of the sale document, which mentions that the government would retain 24 percent stake and the winning bidder would be required to stay invested in the airline for at least three years. The buyer cannot merge it with existing businesses as long as the government holds a stake; it will also be required to list Air India. Also, the government wants the winning bidder to take over 61 percent of the debt.
Besides, potential bidders must have a net worth of ₹5,000 crore. Currently only IndiGo meets that requirement. Despite this, at least four international carriers—British Airways, Lufthansa, Etihad and Singapore Airlines (SIA)—have shown interest in the stake sale.