After the government said on Monday that it plans to sell its entire stake in Air India, Dubai-based airline Emirates on Tuesday said it was not interested in buying stake in the national carrier.
According to news reports, the Dubai-based airline—the largest foreign operator in India has said it was not keen on buying stake in Air India.
“Through our partnerships with SpiceJet and Vistara, our customers have access to an extensive network of cities across India. We do not intend to acquire equity in Air India as we are currently focused on our own organic growth,” the airline said in response to an email query to The Hindu. Emirates said its journey in India has been defined by progressive investment, partnership and growth, the report said.
Air India is currently bleeding heavily with average daily loss pegged at Rs 20-25 crore. The Narendra Modi government is not keen to give any further financial support to the airline and has announced to shut it down if the second disinvestment bid fails.
As per official data, Air India had an operating revenue of Rs 25,509 crore in FY19. As its operating expense during the fiscal was Rs 30,194 crore, the airline had an operating loss of Rs 4,685 crore. On a net basis, its loss was a record high at Rs 8,556 crore (provisional) in the previous financial year.
Air India has a fleet of 125 aircraft and its domestic market share is 11.9 percent as on December 2019.
Learning from its previous experience, the government has decided to sell its entire 100 percent stake in the airline. It is also learnt to have sweetened the deal by removing a large part of its Rs 60,000 crore debt and clearing other liabilities.
A document inviting expressions of interest in Air India, released on Monday, said the government would sell a 100 percent stake in the carrier, which operates both domestic and international routes. The document set 17 March as the deadline for submissions of initial expressions of interest and said any bidder would have to agree to assume roughly $3.26 billion in debt, along with other liabilities, according to a Reuters report.
An industry insider said that IndiGo is one of the strong contenders for Air India but given the fighting between its co-founders it will be difficult to get shareholders' approval for placing the bid.
"Initial bids can be placed but before signing binding agreement shareholders' approval would be required," said the insider to IANS.
In 2018, the government had tried to sell a 76 percent stake in Air India and offload about $5.1 billion of its debt, terms that potential buyers at the time viewed as too onerous.
Air India, known for its Maharaja mascot, has some of India's most lucrative international and domestic landing and parking slots that are key for airlines.
While the overall economic environment remains subdued, industry analysts said that there would be significant investor interest for Air India given its wide domestic and international network, traffic rights, slots at key foreign airports such as London and Dubai, technical manpower and large fleet.
"Besides, the government is ready to go the extra mile to sell off the airline. The government has hinted that it will agree to the demands of potential buyers as it is determined to completely exit the airline business," said Rajan Mehra, CEO of Club One Air and former India head of Qatar Airways.
--With inputs from agencies
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Updated Date: Jan 29, 2020 08:08:32 IST