Addendum
Indian government extends deadline for Air India bids
May 1st 2018
India’s government has reacted to the lack of enthusiasm for its Air India group sale by extending the bid deadline by two weeks and revising several clauses of the Expression of Interest (EoI) document. Read More »
When the Indian government announced the Air India Group EoI on March 28, potential bidders were dismayed to learn the offer included Air India Express and AISATS, a joint venture between the national carrier and Singapore-based SATS Ltd, as well as Air India.
At press time, with no firm bids on the table conditions for disposal of the assets of the airline were legally loosened, but the government continued to insist it would retain a 24% equity in the group if the sale was successfully concluded. The revised EoI listed 160 points of clarification including banning individuals other than airline employees from bidding.
GR Gopinath, who founded India’s first low-cost carrier, Air Deccan, wrote in an Indian media commentary last month that the government’s asking price for the Air India group sell-off was unrealistically high, a view shared by the entire industry.
“The government is harboring the delusion the airline will attract good money, forgetting that Air India is a doddering maharajah. The government is offering 76% equity in the group and will pass on a debt burden of Rs 34,000 crore ($5 billion) to the successful bidder,” he said.
“The debt is unviable and frightening. The airline is presently losing more than Rs 5,000 crore ($750 million) a year. Even the most intrepid and enterprising bidder may shy away.”
