Government has unveiled plans to sell up to 76 percent stake in Air India and transfer the management control to private players, starting the ambitious strategic disinvestment process for the debt-laden national carrier.
According to an preliminary information memorandum released by Civil Aviation Ministry yesterday, the proposed disinvestment will include profit-making Air India Express and joint venture AISATS. The AISATS is an equal joint venture between the national carrier and Singapore-based SATS Ltd.
While the government will retain 24 percent stake in Air India, the winning bidder will be required to stay invested in the airline for at least three years. Expression of Interest (EoI) has been invited from various entities, including foreign airlines. The last date for submission of EoI is May 14 and intimation to the qualified interest bidders will be made on May 28. Bidding can be done as a single player or as part of a consortium.
The bidder should have a minimum net worth of 5,000 crore rupees and the requirement is subject to certain conditions depending on the class of entities. Among others, the Civil Aviation Ministry has said that each consortium member should have positive profit after tax in at least three of the immediately preceding five financial years from the EoI deadline.
Four other subsidiaries of the airline — AIESL (Air India Engineering Services Ltd), AIATSL (Air India Air Transport Services Ltd), HCI (Hotel Corporation of India) and AASL (Airline Allied Services Ltd) — will be hived off through demerger or any other appropriate mechanisms.
Air India had a fleet of 115 aircraft as of December 2017 and serves around 39 international destinations. As on December 1, 2017, the airline had 11,214 permanent employees and 2,913 on contract, among others.