Friday, June 30, 2017

Air India sale: Not just Tatas, foreign airlines should also be allowed to bid for the ailing aviation co

New Delhi: Air India’s disinvestment could become something of a farce if the government decides to restrict it to Indian buyers alone. There has been a view within some sections of the government that equity stake in the airline should be bought only by Indian entities and that foreign investors/airlines should be kept out. If that happens, then the sale process could be stymied.

A source close to development said that apart from Air India’s former owners, the Tatas, some Gulf airlines only seem to be interested in acquiring a stake. “If the foreign airlines/investors are kept out, then it will become almost like a closed sale, with only the Tatas as potential bidders,” this person said, adding at least one successful private domestic airline which many believed would also like to put in a bid has already said in “aviation circles” that it was not keen. And industrialist Anand Mahindra, who is a former independent director on Air India’s board, has also brushed off any talk of investing in the national carrier. As the list of possible suitors for Air India narrows, perhaps the government needs to expand its view on foreign investors.

Remember, India lifted restrictions on foreign airlines acquiring equity in Indian carriers in 2012 when it allowed up to 49 percent equity by foreign airlines. This prompted the Tatas to partner two entities and consequentially launch two separate airlines – Vistara with Singapore Airlines and AirAsia India with AirAsia BhD – from scratch in India. Also, Etihad Airways picked up 24 percent stake in Jet Airways. The restrictions were eased further last year and as of today, a foreign airline can pick up 100 percent in an Indian carrier, in association with a foreign investor.  Qatar Airways has been circling India for a possible airline venture for sometime now.
29/06/17 Sindhu Bhattacharya/First Post

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