By Prarthana Mitra
In the latest pullout from Air India’s disinvestment, Jet Airways opted to rule out its earlier bid for acquiring a stake in the debt-saddled national carrier. After rival domestic airline IndiGo opted out last week, Naresh Goyal-led Jet Airways’s retraction of the “expression of interest” delivers a heavy blow to the government’s privatisation plans for the carrier, which currently has debts amounting to $7.67 billion.
Word on the street last month was that a Jet-Airways-led consortium of domestic and foreign airlines was poised to make their bid on Air India, but their statement yesterday dispelled all speculations. “We welcome the government move to privatise Air India. It is a bold step. However, considering the terms of offer in the information memorandum and based on our review, we are not participating in the process,” Jet Airways Deputy CEO & CFO Amit Agarwal told the PTI.
Jet Airways’s decision to steer clear of the disinvestment comes days after Indigo aborted their plans to acquire the international operations from the national carrier on April 5. IndiGo’s President Aditya Ghosh told the media that “[…]that option is not available under the government’s current divestiture plans for Air India. Also, as we have communicated before, we do not believe that we have the capability to take on the task of acquiring and successfully turning around all of Air India’s airline operations.”
Disinvestment has reached an impasse
In June 2017, the aviation ministry detailed its intention to offload 76% of Air India’s stakes. Indian Minister of State for Civil Aviation Jayant Sinha had also announced the Centre’s decision to transfer management and control of the government-owned airline over to the private sector.
The airline has six subsidiaries, including its low-cost arm Air India Express, the regional arm (Alliance Air) and subsidiary AISATS. The memorandum issued on March 28, however, mentions that divestment of stocks will only take place with respect to Air India, Air India Express and AISATS. The memo also stipulated that the government would retain 24% stake, and it would require the winning bidder to stay invested in the airline for at least three years from acquisition.
Although neither IndiGo nor Jet Airways has divulged any specific reason for withdrawing their participation from the disinvestment process, with two of the leading potential bidders opting out, the government is none the wiser than before, regarding its future plans for the failing airline.