Wednesday, July 26, 2017

Govt. may not split Air India for stake sale

The central government may not sell Air India’s domestic and international operations separately, senior government officials have said. “We are not willing to go back to the days of Air India and [erstwhile] Indian Airlines as the disinvestment process of the national carrier may become unattractive,” a senior Aviation Ministry official, requesting anonymity, said.

This might come as a hurdle to low-cost airline IndiGo’s plan to buy a stake in AI as it was keen on acquiring its international operations.

“AI’s business cannot be split merely based on an expression of interest from a single private player. If we sell lucrative assets separately, it will make the divestment of the domestic unit and subsidiaries tricky,” the official added.

“If we sell lucrative assets of Air India separately, it will make the process of disinvestment of its domestic unit and subsidiaries tricky,” the official added.

The Central government’s concern is that Air India’s valuation may further take a hit if it hives off Air India into two companies and invites bids for its domestic and international operations.

Barely hours after the Union Cabinet gave its in-principle nod to divest stake in Air India last month, India’s largest low-cost carrier IndiGo expressed formal interest in its airline operations. However, the airline made it evident that it will be keen on buying Air India’s foreign operations and its low-cost international airline Air India Express.
25/07/17 Somesh Jha/The Hindu