The Indian government has given “in-principle” approval for the sale of a 76 per cent stake of national carrier Air India as part of a privatisation programme.
A preliminary information memorandum issued by India’s Ministry of Civil Aviation explains that Air India, Air India Express and a 50 per cent stake in Air India SATS Airport Services will be sold as part of a combined entity.
Also stated in the memorandum is that Air India Engineering Services, Air India Air Transport Services and Airline Allied Services are not part of the sale as they will be incorporated into a separate company.
Indian and foreign companies can bid for Air India the memorandum stated, but must have a net worth of Rs50 billion ($750 million) and demonstrate profitability over the last three financial years.
The memorandum also explains that Indian carriers with zero or negative net worth will be allowed to participate in the process, provided they form a consortium with other partners and hold a 51 per cent stake in the consortium.
Companies that are interested in buying the stake have until 14 May to submit expressions of interest, with shortlisted bidders to be announced on 28 May.
Air India serves 54 domestic and 39 international destinations but has been losing money for years.
Some media reports in India claim that home carriers like Jet Airways, Spicejet, Vistara and IndiGo might be interested in buying the stake.