Govt gets going on Air India selloff

Govt gets going on Air India selloff

"Maruti today is nearly a Rs 3-lakh crore company and it is Indian wealth and the same thing would happen in Air India", he said.

It has incurred huge losses but is surviving based on a bailout package of Rs 30,000 crore that began during the tenure of the UPA-2 government and which is continuing under the current NDA government.

"Along with the debt of Rs 33,392 crore and the debt reflecting lease rentals which is off balancesheet, the minimum acquisition price for Air India thus comes to be close to Rs 43,000 crore, unless the government decides to sell some aircraft" he added.

"However, if the member of the consortium is a scheduled airline operator in India, the condition to meet positive profit after tax shall not apply to such member provided shareholding of such member is restricted to maximum of 51 per cent of paid up equity share capital of the consortium (special goal vehicle)".

In turn, the airline holds full stake in Air India Express, while it holds a 50 per cent stake in the joint venture Air India SATS Airport Services (AISATS).

In June, the Union Cabinet had given in-principle approval for national-carrier Air India's stake disinvestment.

On March 22, Air India's maiden flight to Israel landed in Tel Aviv, reducing the travel time substantially after Saudi Arabia for the first time allowed a commercial flight to use its airspace, indicating a thaw in relations between the Arab kingdom and the Jewish state.

An open comparative bidding process will determine the new buyer and the disinvestment process is expected to be completed by December 2018.

Air India has six subsidiaries - three of which are loss-making - with assets worth about $4.6 billion.

The 85-year-old Air India is also a flag carrier with strong global brand recognition and is "extremely well placed to tap the world's largest aviation market growing at 18 per cent plus rate", it says. On Wednesday, Prime Minister Narendra Modi's government took a decisive step in that direction - of exiting Air India.

Besides IndiGo, aviation industry majors SATS, Bird Group and Celebi have shown interest but in buying Air India's ground handling unit.

India's biggest airline, IndiGo, has expressed unsolicited interest in.