The Ministry of Civil Aviation, Government of India has called out bids for the sale of 76% stake in the national carrier Air India and 100% stake in low-priced worldwide subsidiary Air India Express.
The trade union has also said that despite opposition from unions, the government privatised the airports and "forcibly" merged the Indian Airlines and Air India which perpetuated the problems for the national carrier.
What one gets with a 76% stake in Air India is an operational fleet of 104 aircraft of which only 69 are owned outright or through financial lease by the airline. The Minister of State for Civil Aviation added that the government will cede all control of the airline and keep only a residual stake.
The employees of the Air India would be made participants and their future would be better, he said.
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Air India, thankfully, has certain strengths - an operating fleet of 138 aircraft, an extensive network connecting around 54 domestic and 94 global destinations (including through code share agreements with foreign carriers), prime landing/parking slots and, above all, brand equity - that serious industry players might want to leverage. "It's like the government wants to sell its old vehicle, but still wants to drive it every Sunday", the late Saumitra Chaudhuri, a member of India's erstwhile Planning Commission, once told me.
Bids for the assets are expected to be submitted by May 14. The plan, detailed Thursday, calls for the government to offload 76 percent of its holding and $5.1 billion of the airline's $7.8 billion debt. Singapore Airlines Ltd and India's Tata Group, which run a joint venture airline named Vistara in India, said they were also open to look at the sale, but haven't elaborated yet.
The minister also clarified that only operational core real assets will go to the new Air India and all non-core land assets will be transferred to a special goal vehicle (SPV).
The Israeli government has lauded the new Air India route from New Delhi to Tel Aviv as a symbol of tightening ties between the countries, as well as a harbinger of Israel's improving status in the region. So far, only IndiGo has publicly expressed a desire to acquire Air India.
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