Within days of the government seeking Expression of Interest for Air India stake sale, budget carrier IndiGo and Naresh Goyal-led Jet Airways opted out of the race citing not so favourable terms to strike a deal. However, all is not over yet for the Maharaja as some major airlines have expressed their interest in buying the state-run carrier.
The Times of India today reported that four major international airlines - including British Airways, Lufthansa and Singapore Airlines - are among those that are considering the disinvestment proposal.
This comes a day after a report emerged that the Tata Group, who was keen to buy Air India and waiting for the detailed memorandum, may not bid for the national carrier as the terms are not workable. However, the TOI report suggest that the four airlines are in active consultation with the government.
"Among the Indian players they are in touch with to form a consortia is a medium-sized domestic airline. The head of an international airline is also eying the process with interest. A leading Indian industrial house is also in touch," the report said citing a source. It also said that the overseas carriers are in talks with Indian business houses to meet the criterion of substantial ownership and control.
On March 28, the government unveiled plans to divest up to 76 per cent stake in Air India and transfer the management control to private players. The government will retain 24 per cent stake in the national carrier and the winning bidder would be required to stay invested in the airline for at least three years. Bidding can be done as a single player or as part of a consortium.
British Airways' parent company International Airlines Group in a response to TOI said: "IAG doesn't comment on rumours or speculation." The report also said that apart from these four airlines, sovereign funds are also in touch with the government. The last date for submission of Expression of Interest is May 14 and intimation to the qualified interest bidders would be made on May 28.
So far, two airlines IndiGo and Jet Airways have formally announced that they will not participate in the process. Both the airlines found the terms and conditions laid out in the proposal simply not workable. IndiGo President and whole time Director Aditya Ghosh in a statement issued earlier this week said: "From day one, IndiGo has expressed its interest primarily in the acquisition of Air India's international operation and Air India Express. However, that option is not available under the government's current disinvestment plan for Air India."
There were quite a few aviation players who were interested before the government put out the detailed proposal that included Tata as well. Last year, Tata Sons Executive Chairman N Chandrasekaran in an interview had said that the group was interested in buying Air India but was waiting for the details.