Air India Divestment: Govt Extends Deadline, Issues Clarifications

The government has clarified that “individuals (other than employees) are not allowed to bid”.

2 min read
Air India Divestment: Govt Extends Deadline, Issues Clarifications
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The government extended the date for submitting an expression of interest for picking up 76 percent stake in Air India to 31 May from the earlier deadline of 14 May. It also came out with a set of clarifications on the proposed strategic disinvestment in Air India and said individuals other than the airline's employees would not be allowed to bid.

The government had issued a preliminary information memorandum on 28 March for the proposed sale of up to 76 percent stake in Air India along with management control to private entities.

The disinvestment would include profit-making Air India Express and joint venture AISATS, an equal joint venture between the national carrier and Singapore-based SATS Ltd.

The government has put out clarifications in response to 160 questions from interested bidders on the disinvestment of Air India and its two subsidiaries — Air India Express and AISATS.

According to the 19-page document released on Tuesday, the government has clarified that “individuals (other than employees) are not allowed to bid”.

Clarifications have been provided on various other aspects, including those related to slots, bilateral rights and employee rights.

Details of existing slots and code share agreements will be provided at RFP (Request for Proposal) stage. It is expected that there will not be any impact of disinvestment on existing slots and bilateral rights.
The government

"Bidders are advised to undertake their own assessment for the impact of disinvestment process on the existing code share agreement," the government said.

This was in response to queries on whether privatisation would impact renewal of existing slots and bilateral flying rights.

For more than 50 queries, the government has said details would be provided at the time of RFP stage.

To a query related to staff, the government said, "Employee concerns are being suitably addressed".

"Grounded aircraft are assets of Air India. Successful bidder/ Air India post strategic disinvestment can deal with them/ dispose as deemed fit subject to the terms and conditions of the Shareholders' Agreement," it said.

As per the information memorandum, issued in March, the government would retain 24 percent stake in the national carrier, the winning bidder would be required to stay invested in the airline for at least three years.

In the set of clarifications, it has been emphasised that "it is a considered decision by Government of India to retain 24 percent stake".

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