Air India disinvestment: IndiGo, Qatar Airways consortium likely to table bid for the national carrier

A consortium of low-cost carrier IndiGo and Qatar’s national carrier, Qatar Airways is likely to make a bid for national carrier Air India

FP Staff March 21, 2018 14:12:10 IST
Air India disinvestment: IndiGo, Qatar Airways consortium likely to table bid for the national carrier

A consortium of no-frills carrier IndiGo and Qatar Airways is likely to table a bid for ailing national carrier Air India (AI), according to a media report. Sources close to the development told The Financial Express that the net worth criteria that bidders must meet is likely to be fixed at Rs 1,000 crore.

“This means these airlines can come together and bid as a consortium with a private equity partner or a sovereign wealth fund,” a source involved in the process of the Air India divestment told the newspaper.

While a group of ministers are still in the process of finalising the contours of Air India stake sale, the civil aviation ministry had said that it had officially received an expression of interest from IndiGo and an unidentified foreign airline.

Air India disinvestment IndiGo Qatar Airways consortium likely to table bid for the national carrier

Representational image. Reuters

The government is likely to retain a 24 percent stake in, a Moneycontrol report last week had cited CNBC- TV18 sources as saying.

A notification announcing the contours of the Air India sale is expected this week. The expression of interest (EoI) document could be released sometime this month, CNBC-TV18 reported on 15 March.

Other bidders 

A consortium of Jet Airways, Air France-KLM and Delta Airlines had reportedly expressed its interest in bidding for Air India, PTI had said. Sources told the news agency that a consortium of three full services, including Jet Airways, was keen to submit a bid for the troubled national carrier.

Jet Airways' possible bid for Air India, by way of a consortium, came less than four months after the Naresh Goyal-led airline enhanced a cooperation agreement with the Air France-KLM Group.

Air France-KLM and its partners Delta and Alitalia operate the largest trans-atlantic joint-venture with over 270 daily flights.

Though Air India is saddled with huge debt, acquiring the airline can help boost the buyer's footprint in India, the world's fastest growing aviation market, and will give the buyer access to so-called bilateral rights.

Govt's disinvestment plan 

The government expects to complete the privatisation of Air India this year. It aims to split the airline into four different entities and hopes to sell each entity.

Last month, the Minister of State for Civil Aviation, Jayant Sinha, said he had discussions with several players for Air India as well as the various entities that belong to the Air India group.

Air India, its low-cost arm Air India Express and subsidiary AISATS are likely to be offered as one entity, while regional arm Alliance Air will be sold as a separate entity. Besides, Air India Air Transport Services Ltd (AIATSL) and Air India Engineering Services Ltd (AIESL) will be disposed separately. AISATS is a 50:50 joint venture between Air India and Singapore Airlines' group entity SATS Ltd.

In January, in a move designed to expedite Air India's strategic divestment, the Cabinet approved changes to India's foreign direct investment (FDI) rules to allow foreign carriers to own 49 percent of the debt-ridden national carrier. Last October, the government had said that it would prefer selling Air India to a domestic buyer, Reuters had reported.

In 2017, aviation services provider Bird Group had expressed an interest in acquiring Air India's ground handling subsidiary AIATSL.

With inputs from agencies.

Updated Date:

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