After Multiple Rebuilding Attempts, (Part of) Air India Is for Sale
Joe Cortez February 13, 2020
Despite trying to revitalize and rebuild the troubled airline, the government of India no longer wants anything to do with their troubled asset. Air India is officially for sale, with federal officials accepting sealed bids for a closing date by the end of March 2020.
The Indian government has tried nearly everything they can to bring Air India, the state-owned carrier, back into profitability. Now, federal officials are officially calling it quits on the troubled asset and want to transfer the airline to a new owner. The Economic Times of India reports the government is accepting bids for a 100-percent sale of the carrier, with the goal of closing on it by the end of March 2020.
A limited sale for a limited airline
The “100-percent stake” sale in Air India would only include many of the carrier’s physical assets, including aircraft, routes. Other assets – including land, buildings, and art (including “The Maharaja”) – would not be included in the sale. Additionally, the airline would have to be majority-owned by an Indian entity. Under Indian law, foreign bidders would only be allowed to acquire up to 49 percent of the company.
The rest of the airline will be pieced out in other sales. Other parts for sale include low-cost subsidiary Air India Express, Alliance Air, a 50-percent stake in ground-handling company Air India Singapore Airport Terminal Services, and both the ground handling and engineering divisions of the airline.
In order to make the deal better, the airline will also assume two-thirds of the airline’s debt before the sale. A bidder would only be responsible for $3.26 billion in debt, down from a total $8.69 billion owed by the company. Additionally, three percent of the new Air India would be offered to employees as stock options.
The second attempt to sell Air India
Bidders interested in purchasing the carrier have to act by early March. The government will close bids on March 17. From there, winning bids will be announced with assets distributed by the government.
“Air India and Air India Express are a great asset and the average age of aircraft in Air India, Air India Express is eight years,” Investment and Public Asset Management secretary Tuhin Kanta Pandey told The Economic Times. “Any private investor can turn it around by bringing financial efficiencies. Government has limited financial resources and the private sector can bring required capital.”
This isn’t the first time India tried to dump off their national airline to another entity. In 2018, the government unsuccessfully put a 76-percent stake in the airline on the block for bid.
You’re Reading
I guess i am the only one who has always had the best experiences with Air India... even when I traveled in the middle seats, even when they ran out of vegetarian food for me... they always went above and beyond to accommodate me and offered so much more.... keeping me delighted. On the other hand, I have flown United a few times and it was a bit of miserable experience with crews. Remember flying Swiss and cabin crew calling me - "sir or madam, or whatever you are!" - hilariously sad! Remember flying Air Canada and there was extreme cold air coming from the side, reported, no response! Remember flying American business class, was offered water and i politely declined and then wasn't offered a meal! - LOL? +Many more interesting stories.... Moral of the story - There will always be good and bad experiences. Where some people find an airline terrible, some find it outstanding. Some find the cabin crew old and shabby, some find them caring and loving. There will always be room for improvement.
Just flown Air India First Class LHR to DEL on my own money not business cash and it was the most unpleasant, depressing and miserable experience I have ever taken in over 30 years of flying in every class on many airlines (including Afghan Ariana and PIA) . Filthy Seats! Bored Crew! Awful Food! Terrible ! Horrible and a Disgrace! . If Air India was a horse it would have been shot to put it out of its misery years ago. Only a fool would consider buying it ! and as for me flying Air India in First (or any other) class - Never Ever Again!
buy it for a dollar is a loss, of a dollar..
I traveled by Air India many many times (11 times in the past three months). Absolutely on time, flawless take off and landing, courteous service. Those who criticize Air India should read the post by Dr. Ellis-you would know that the hatered was not directed towards Air India but towards the people of India.
Their aircraft may be "new" but when you are entering a cabin, at least on the domestic flights, you sure don't feel like it. TVs off with a sticker saying welcome or something. Makes you truly feel you are flying on a clunker. So, from the article, the employees are not part of the transaction? That may be wise as there is something truly toxic in that corporate culture. In the air, it is OK, but the ground game is nowhere near good. Sad for those that actually are good employees, but I don't see any good buyers take them in without an interview and a definite cut from the "good old days" of the Maharaja.