Govt plans to sell 76% stake in Air India, cede management control

Air India seeks buyer

Even as the Air India has begun its thrice a week service to Tel Aviv in Israel flying over Saudi airspace, the national carrier El Al airline announced that it has approached Supreme Court terming it the deal to be unfair.

In October 1982, the then Congress government had signed a joint-venture agreement with Suzuki Motor Corporation to start Maruti Udyog. The second aim is to ensure that taxpayers' money is put to better use, which would mean the government exiting all businesses that are loss-making and not serving any tangible social goals either.

India intends to sell the remaining stake in Air India, which may include selling shares during an initial share sale. The company made an operating profit of about Rs 3 billion ($46 million) in the year through March 2017, primarily due to a slump in oil prices. "So, it makes a lot of sense to not sell 100 per cent at one go", he added.

The 24% stake that the government retains is their attempt to be prepared to cash in on any future improvement in the fortunes of Air India.

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"For that you need 26 per cent". The rest will be allocated to a government holding company. "This is what they did in Maruti also", Bhargava explained. This rises to 42.8 percent when only Indian carriers are considered and includes 43 worldwide destinations and an additional 51 served through codeshare agreements. "Maruti after disinvestment has grown much faster and has created much more value for shareholders and the goal of selling the shares is to create value", Bhargava said. "Slots can be utilized to take benefit of India's favorable geographic position in global air travel market and develop hub for worldwide operations". With its current domestic market share at just over 13 per cent, the government simply has no reason to stay invested in this so-called national carrier. The low cost global arm Air India Express would be put up for sale apart from the national carrier's stake in AISATS, an equal joint venture with Singapore-based SATS.

In January, during a meeting of the panel, most members had sought the withdrawal of the draft report which said that it was not an appropriate time to divest stake in Air India and that the airline should be given at least five years to revive.

The Indian Government has issued a call for Expressions of Interest (EOI) in a 76% stake in Air India Limited as well as two other assets.

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