The government announced on Twitter that it has received multiple bids for its stake sale in loss-making Air India as the deadline for submission of expressions of interest ended on Monday evening.
“Multiple expressions of interest have been received for strategic disinvestment of Air India. The transaction will now move to the second stage,” the Secretary, Department of Investment and Public Asset Management, said in a tweet.
Tata Sons, India’s autos-to-steel conglomerate, is expected to have submitted an initial bid for the loss-making airline, according to sources. However, a Tata spokesperson declined to comment.
A group of 209 Air India employees has also submitted an expression of interest for the national carrier in partnership with a private financier. The bid process is being spearheaded by Meenakshi Mallik, who is the current commercial director at Air India.
While the bidding conditions of Air India allow a bid by employees, disinvestment guidelines mandate that the company will not be able to partner any private company. It has to partner with either a bank or a financial institution.
Prime Minister Narendra Modi’s government in January renewed its push to sell its entire interest in the debt-ridden airline, which has been kept afloat with the infusion of heavy government funding since 2012. The government has stated that if Air India is not privatised it will have to be shut down,
An effort to auction a majority stake almost two years ago did not elicit even a single bid, forcing the government to ease terms. It has also extended the deadline several times this year due to Covid-19 and further eased the terms to attract bidders.
Bidding is taking place at a time when the airline industry worldwide is going through a massive slump due to travel restrictions to contain the pandemic.
Tata already operates two airlines in India – full-service carrier Vistara, which is in partnership with Singapore Airlines, and budget airline AirAsia India along with Malaysia’s AirAsia Group.
Air India operates a fleet of 125 planes including both narrow body and widebody aircraft which include Airbus and Boeing planes. A successful bidder would win control of Air India’s 4,400 domestic and 1,800 international landing and parking slots at domestic airports, as well as 900 slots at airports overseas.
It would also get 100% of the low-cost arm Air India Express and 50% of AISATS, which provides cargo and ground handling services at major Indian airports..
