Weeks after a consortium of Jet Airways, Air France-KLM and Delta Air Lines expressed interest in buying Air India's stake, it has been reported that IndiGo along with Qatar Airways may also bid for the national carrier. If it happens, then this will be IndiGo's second expression of interest to buy Air India.
Earlier, the low-cost carrier IndiGo had sent formal expression of interest for Air India's airline arm. IndiGo's priority was to buy overseas operations of Air India in case the government was willing to sell domestic and international operations separately. However, Union Minister of state for Aviation Jayant Sinha had ruled out such possibility and told the potential bidders that the government would sell Air India's both domestic and international operations as an 'integrated airline'.
Air India has five subsidiaries: Air India Express, Air India Air Transport Service, Air India SATS, Alliance Air and Air India Engineering Services. Reports suggest that Air India, Air India Express and Air India-SATS are likely to be sold as one entity. Air India-SATS is a joint venture which provides ground and cargo handling services. Air India Air Transport Services and Air India Engineering Services will be sold separately, PTI reported.
Earlier, Turkey's Celebi Aviation and India-based Bird Group had expressed their interest in Air India's ground handling subsidiary. Singapore Airlines is also open to buy stake in Air India. In an interview to Business Today, Singapore Airlines general manager for India David Lim said: "We are keeping an open mind on the bidding process for Air India. We have not closed the door yet." Singapore Airlines has a long history in the Indian aviation market. Nearly four years ago, SIA tied up with Tata Group to start full-service carrier Vistara.
Last year in June, the Cabinet Committee on Economic Affairs gave in-principle approval for strategic disinvestment of Air India and its five subsidiaries. To implement the cabinet's decision, the government further constitued an Air India-specific Alternative Mechanism to guide the process on strategic disinvestment that included treatment of unsustainable debt of Air India; hiving off of certain assets to a shell company; demerger and strategic disinvestment of three profit-making subsidiaries; the quantum of disinvestment and the universe of bidders.
The total debt of Air India till March 2017 was Rs 48,876.81 crores. The net loss of the national carrier during the last three financial years as per audited accounts was Rs 5,859.91 crore in FY 2014-15, Rs 3,836.77 crore in FY 2015-16 and Rs 6,279.60 crore in FY 2013-14.