Government will invite initial bids for a stake sale in state-run carrier Air India in the next couple of weeks, Civil Aviation Secretary Rajiv Choubey said on Thursday in a speech at an air show in Hyderabad. Companies including low-cost Indian carrier IndiGo, owned by InterGlobe Aviation, Tata Group and Turkey's Celebi Aviation Holdings, have expressed an interest in buying some of Air India's businesses. The Cabinet on January 10 allowed foreign airlines to invest up to 49 per cent in Air India under the approval route. This move is expected to expedite Air India's divestment process. A group of ministers is in the process of finalising the contours for the proposed strategic stake sale in the national carrier.
Last year, the Cabinet Committee on Economic Affairs (CCEA) gave its in-principle nod for the strategic disinvestment of the airline. Government has yet to decide on what to do with the carrier's debt burden of $8.5 billion.
On January 14, NDTV had reported that the government is exploring options of absorbing Air India employees in public sector enterprises and voluntary retirement package as it moves ahead with the airline's disinvestment amid stiff opposition from worker unions, sources said.
The Parliamentary Standing Committee on Transport, Tourism and Culture had concluded that the government should review its decision to privatise or disinvest Air India and explore the possibility of "an alternative to disinvestment of our national carrier which is our national pride".
The draft report had suggested the government should revisit its decision to privatise the national carrier at the end of the 10-year turnaround plan in 2022.
However, aviation think tank CAPA said that postponing disinvestment of Air India by five years will further erode its value. The statement was made in response to a draft report by a Parliamentary panel recommending the government review its decision on the airline's stake sale.
Under a turnaround plan approved by the previous UPA regime, Air India is to receive up to Rs. 30,231 crore from the government subject to meeting certain performance thresholds.