Cloudy Future for Air India

Air India's disinvestment process has finally kicked off with the government inviting bids from potential buyers for a 76 per cent stake sale. The sale document highlights the companys financial situation, workforce statistics and eligibility criteria for bidders for the sale of Air India and its two subsidiaries - Air India Express and Air India SATS Airport Services. There are, however, too many pre-conditions that bidders have to meet.

To start with, the new owner will have to bear 61 per cent of the current debt and liabilities of the three entities. Then, there are reports that the winner may not be able to rationalise staff for about a year after the completion of the deal. While there is an objection from Mamata Banerjee on the divestment, the fact that the government plans to retain 24 per cent stake ensures that it will not miss out on any opportunity of future gains in case of a turnaround.

Manu Kaushik