DNA Money Edit: For Maharaja, there’s more turbulence ahead

Finally, Air India is up for sale. The Union Cabinet has decided to form a group under the finance minister to work out the modalities of the strategic sale of the airline and its five subsidiaries. The group will take a final call on the treatment of unsustainable debt of Air India, hiving off of certain assets to a shell company and demerger and strategic disinvestment of three profit-making subsidiaries, apart from deciding the quantum of disinvestment.

While Tatas have shown interest in the 70-year old aviation company which they owned before it was nationalised in the early 1950s, the government would like to see a few global bidders join the fray so that it is sold to a sole bidder, bowing to its unrealistic demands. The airline, before its nationalisation, was known as Tata Airlines and was founded by the former chairman of Tata Group, JRD Tata in 1932. So if Tatas take over the company, it makes a full circle for Bombay House.

Air India has the largest domestic and long-haul fleet of 140 planes in the country and flies to more than three dozen international destinations. The huge and unsustainable debt and a massive workforce have made the company nearly incapable of flying.

The government faces many a challenge before it can take it closer to a logical conclusion. If it opts for golden share policy and holds the majority voting right even after being a minority shareholder, it may put off potential buyers. The biggest challenge will be the debt write-off to make the bride look beautiful.