Centre may get around Rs 15,000 crore from Air India sale

The government is hoping to fetch approximately Rs 15,000 crore from the sale of national carrier Air India, its subsidiary Air India Express and AISATS - a 50:50 joint venture partnership between Air India and Singapore Airport Terminal Services (SATS) Limited.

Potential bidders are attributing zero value to the equity of the financially troubled company, with the Tata Group deemed to be a frontrunner for taking over Air India.

Whilst the Centre has appointed RBSA Advisors for valuation of the national carrier, its final reserve price will be arrived at by a group of ministers after all the financial bids are received.

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Meanwhile, bidders are hesitant to ascribe any substantial value to intangible assets such as bilateral rights and airport slots, otherwise considered prime, a source told the Business Standard.

"Unlike airports like Heathrow, slots cannot be traded in India. It becomes intangible as value of such assets depends on how a bidder is willing to use it," the source added.

Another ground for the present situation is the slump in the value of wide-body aircraft like Boeing 787 and 777 as well as older generation aircraft such as Airbus 320 and Boeing 737 because of the impact of coronavirus pandemic on air travel.

"The suitors' plans revolved around doing sale and leaseback of Air India's owned aircraft and earn liquidity. But with the pandemic, the new owner may not require those aircraft or good value for those in the lease market," the source stated.

Air India presently has a fleet of 121 aircraft, out of which 65 are owned, while its subsidiary Air India Express has 25 Boeing 737, of which 10 are owned.

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