India’s flag carrier Air India has moved one step forward in the direction of its privatisation. The Union government will select the winner in Air India’s disinvestment in about three weeks. The government is selling off its 100 per cent stake in the state-owned airline that has been 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.
India’s salt to software conglomerate, Tata Group has submitted a financial bid for Air India Ltd sale. This is the second attempt when the government is trying to sell the loss-making national carrier. The bid was made on Wednesday by Tata Sons Ltd., the group holding company, which controls Jaguar Land Rover and owns a majority stake in AirAsia India. Along with Tata Group, SpiceJet owner Ajay Singh has also bid for Air India as many media reports said.
After receiving the bids, DIPAM Secretary, Tuhin Pandey took to twitter and said, “Financial bids for Air India divestment received by Transaction Adviser. Process now moves to the concluding stage.” The two high-level committees will finalise the reserve price for the national carrier within this period, according to reports.
In the starting, for taking over the national carrier of India, four bidders were in the fray that included Tata Sons, another consortium of some AI employees and Interups, and Spicejet. 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.
After receiving the bids, transaction advisor will analyse the bids and then will declare the owner of Air India. But according to experts, this process is not going to complete within 3-4 months and once the owner of this airline will be announced, the asset transfer is going to take more than 5-6 months.
The Tatas currently have a stake in two airlines—- AirAsia India, which is a low-cost carrier and full service carrier Vistara, If Tatas will get control of Air India then theAir India will be back in the hands of its founders. Tatas set up Tata Airlines in 1932, which was later in 1946 renamed as Air India. The government took control of the airline in 1953 but JRD Tata continued to be its chairman till 1977.
Whoever will be at the help of ailing airline 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.
The government has expedited the process as the privatisation of Air India has been impending since the last 2 years. 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.
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