31 January , 2020 Fdiindia
Govt Met With 9 Companies to Discuss Air India Sale: Sources
As per sources with knowledge about the matter, government officials met with as many as nine companies in order to discuss the sale of the loss making carrier Air India during roadshows. These discussions were held to determine interest in stake sale in the air carrier.
The sources revealed that officials met with the executives of companies including IAG SA’s parent company British Airways, India’s biggest airline IndiGo, Tata Sons Ltd and SpiceJet among others.
Air India is like a loss making machine for the nation and after the failed attempt to sell off the airline in 2018, it is crucial for the Modi government to sell Air India in order to help bridge the widening fiscal deficit that is worsened by dismal tax collections and a USD 20 million corporate tax cut.
Air India, which was initially named Tata Airlines when it first started out in 1932 and then later acquired by the government, has not made any money since the year 2007. Now, when we are into 2020, it is getting more and more essential for the company to sell. Last year the air carrier had a loss of USD 1.2 billion, which was its highest ever. The total debt of the airline stands at USD 8.4 billion.
Despite losses, Air India possess profitable assets like the prized slots at the London’s choked Heathrow airport, a fleet of more than 100 planes and thousands of trained pilots and staff.
According to bidding documents released recently, the government of India is going to take most of the debt, leaving the potential buyer to take over USD 3.26 billion of liabilities.
In November, Aviation Minister Hardeep Singh Puri told the Indian parliament that Air India will have to be closed down if it can’t find itself a buyer.