Air India's domestic, global ops to be sold together, says Jayant Sinha

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

live

• bselive
• nselive

Volume

Todays L/H

More

×

Air India's domestic and international operations will be sold together, Union minister Jayant Sinha said today.

The government has initiated the process for strategic disinvestment of debt-laden Air India as part of efforts to revive the national carrier. Sinha's comments assume significance against the backdrop of some players expressing their interest only in certain verticals of Air India.

So far, IndiGo is the only airline that has formally expressed interest in the national carrier's disinvestment process. However, the budget carrier is interested only in Air India's international operations and subsidiary Air India Express.

"What we will be offering through the bidding process is the integrated airline (Air India), which means both domestic and international operations (together)," Sinha, the Minister of State for Civil Aviation, said here.

On the disinvestment process, he said the government is still in the process of identifying which subsidiaries of Air India should be offered separately.

He added that a bidder can participate in different bids for the airline's flight operations and its different subsidiaries.

"The goal here is to provide flexibility to bidders so that they can bid even if there are individual bids (for different subsidiaries of Air India). And, if you want to reintegrate (them) you can do that."

Air India has several subsidiaries including Air India Air Transport Services Limited (AIATSL), Air India Charters Limited, IAL Airport Services Limited, Airline Allied Services Limited and Air India Engineering Services Limited.

In June, after the Cabinet gave its nod for Air India disinvestment, IndiGo wrote to the ministry of civil aviation with an eye on the airline's international operations.

"Kindly treat this letter as our expression of interest in acquiring the international airline operations of Air India and Air India Express. Alternatively, we are equally interested in acquiring all of the airline operations of Air India and Air India Express," IndiGo President and WholeTime Director Aditya Ghosh wrote in the letter.

Aviation services providers Bird Group and Celebi have also shown interest in the ground-handling subsidiary AIATSL.

Sinha said that it has appointed consultancy group EY as its transactional advisor, which will prepare a confidential information memorandum which will invite multiple bids for the integrated airlines as well as different subsidiaries which will be available for independent bids.

He added that awarding of bids will be completed in six-eight months. On whether the private player who is awarded the bid for the airline will get to keep the Air India brand, Sinha said that matter is still being considered.

"The terms of sale will be specified in the confidential information memorandum, which will be approved by the alternate mechanism," he replied.

The Union Cabinet gave its in-principle approval for Air India's disinvestment in June and constituted an inter-ministerial group to work on the modalities for the stake sale.