He also announced then that Air India Specific Alternative Mechanism (AISAM) has approved 100 per cent sale of government stake in Air India for the strategic disinvestment of the national carrier. The last date to submit the EoI is March 17, and the government will intimate the qualified bidders by March 31.
India said Monday it plans to sell its entire 100% stake in the national carrier Air India to shore up falling government revenues amid an economic slowdown, after an initial attempt past year failed to attract a single bidder.
India has been trying to sell shares of its debt-ridden national carrier, Air India for some time, but failed to find any buyers. The government-owned airline's interests in entities such as Air India Engineering Services, Air India Air Transport Services, Airline Allied Services and Hotel Corporation of India would not be a part of the disinvestment transaction.
Get the best of News18 in your inbox: subscribe to News18 Daybreak. The two airlines combined control around 12.7 per cent of the Indian domestic market as of Q2FY20. It wants to raise 1.05 trillion rupees ($14.6 billion) through the sale of public assets by March 2020. The bidding party will have to bear with only Rs 23,286 crore of the total Rs 60,000 crore debt of Air India.
During FY 2019, Air India carried around 22.1 million passengers and recorded operational revenues of Rs 25,508 crore. The remaining debt would be allocated to Air India Assets Holding Limited.
The government in 2018 https://www.reuters.com/article/us-air-india-divestment/air-india-sale-gets-no-bid-exposes-hurdles-for-modis-divestment-drive-idUSKCN1IW1HP tried to sell 76% of Air India and offload about $5.1 billion of its debt, with terms including the retention of all employees.
"It is clarified that there would be no re-allocation of debt and liabilities of AISATS".
Weaknesses Apart from the huge financial burden, Air India's employee to aircraft ratio is also on the higher side. This is a major shift from the government's stance in 2018 when it wanted to divest only 76% stake in the national carrier.