Wednesday, June 23, 2021

Struggling Air India getting buyout bids, including one on behalf of employees

The airline has many assets, including prized slots at London's Heathrow airport, and a fleet of more than 100 planes.

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A number of bids have been put forward for India’s loss-making national carrier before this week’s deadline.

The Indian government tried to offload its stake in Air India in 2018 but failed to attract a single bid.

This time, bids are trickling in, reports the BBC.

India’s Prime Minister Narendra Modi is keen to sell the government’s entire interest in the airline, which has been kept aloft by a bailout and racked up billions in debts.

The airline has many assets, including prized slots at London’s Heathrow airport, a fleet of more than 100 planes and thousands of trained pilots and crew.

One bid is reported to have been put forward by the Tata Group, which originally founded the airline in 1932. Tata, which now owns Jaguar Land Rover, sold its stake to the government in the 1950s.

Another bidding group represents employees and plans to offer them a controlling stake in the struggling airline.

US-based investment firm Interups would hold 49% of Air India while a controlling stake of 51% would be held by its employees. “We are giving an open offer to employees of Air India to substantially own the airline,” Interups chairman Laxmi Prasad told the BBC.

“Our group will invest the entire monies required for the airline, with no capital requirement from employees to contribute into the acquisition effort.”

Calling employees the “backbone to run the airline”, Prasad added that the 51% stake would be “in exchange for the deep intangible contribution you all would be making for the airline. No-one knows Air India better than its employees and management.”

“Any new owners will need to invest heavily in Air India, improving its technology and customer services operations,” said Jitendra Bhargava, former executive director of Air India and author of the book, “The Descent of Air India”.

“But India is a growing market and offers huge potential. My take is that Air India is better run as a private company than by bureaucrats.”

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