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Air India: Finally on the Move?

Air India

Things seem to be finally moving on the crucial issue of who will own and run Air India, which is to be disinvested by the government.

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  1. Financial investment bidders are finally emerging for the beleaguered Air India airline.
  2. It has been several years of trying to sell the national carrier, with attempts being blocked for various and sundry reasons.
  3. Still on the docket is the airline’s huge losses – as in who will handle them – the new buyer or the government?

Tata Sons, which founded Air India airline in 1932 and then got out of it in 1953, is once again a bidder for the airline, and it has submitted financial bids along with some other key bidders.

SpiceJet Chairman, Ajay Singh, has also made an offer, and some investment funds have also joined Singh in the bidding process to secure the airline. Singh has been a major player in the aviation field for some years now, and his role now in Air India is being watched with great interest.

Ajay Singh

Security clearance and fixing of a reserve price for the sale are two vital aspects that the government has to resolve. Other factors which have been of concern are the question of how to deal with the massive losses that Air India has accumulated over the years, and how the other assets of the Maharaja line are to be treated, including its real estate and art collection. Ground handling and air catering have also been issues of concern ever since the talk of disinvestment came up.

Over the past few years, several attempts have been made to sell the national carrier, but those attempts were held back for various reasons. One of the major reasons was how to answer the question of who will handle the massive losses – the new buyer or the government?

Staff issues have also been another trouble spot, with questions like who will be retained by the new buyer, and who will be sacked? The unions and associations were at one stage keen to have a say and were even thinking of bidding.

The role, if any, of foreign buyers was also a discussion point, but now it seems the major bidders have come up with financial bids in the form of the participation of Tatas and Ajay Singh.

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Anil Mathur - eTN India

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