IndiGo, Jet Airways gone; who all remain to buy stake in Air India: 10 points

After the two airlines, IndiGo and Jet Airways decided to opt out from the Air India sale, reports surfaced lately that Tata Sons, a major bidder might also dropped its plan to buy the stake in the national carrier. The report cited the unfavourable and too dificult conditions that the government has put in front the bidders as main reason behind the change of mind of the potential bidders. 

The government in one of its conditions has said that the winning bidder cannot merge the airline with existing businesses as long as the government holds a stake. The winner might also be required to list Air India and would need to abide by conditions designed to safeguard employee interests, restricting its ability to cut staff.

Now as we wait for the Tata group's final call over the decision, below we have listed the 10 latest developments related to the Air India privatization including the names of airlines which still remain in the race. 

1. According to a TOI report, four major international airlines — including British Airways, Lufthansa and Singapore Airlines — are among those that have shown interest in Air India’s disinvestment process. 

Citing sources, the report also claimed that a gulf carrier has been also interested in the sale. 

2. According to Air India sale's condition, a foreign airline can have a joint venture in India provided it has a local partner with at least 51% stake and effective control. Besides, the government has offered to sell 76 per cent in the loss-making national carrier and will transfer a substantial chunk of its debt into a separate company.

3. Earlier, budget carrier IndiGo, which had initially evinced interest in acquiring Air India's international operations, said it was not in fray to bid for the national carrier as such option was not available under the disinvestment plan.

4. Following the IndiGo's footsteps, Jet Airways opted out from bidding for Air India, it has now been reported that Tata Group might also do the same. 

5. As mentioned earlier, Tata Group is not happy with the conditions as it thinks they are very unfavourable. 

6. Earlier, the Jet Airways management had held discussions with its alliance partners Air France-KLM, Delta, and other investors to put up a proposal. But the airline has now decided to call off its efforts.

7. There has also been much to-and-fro about whether foreign airlines and foreign investors are permitted to bid for Air India, before the government opened up the airline to 49 per cent foreign investment. This implicitly means even if a foreign airline or investor comes forward, it will have to partner an Indian entity to assume majority 51 per cent control in Air India. Though the FDI cap is in line with the sectoral cap and cannot be faulted, this does put a sort of spanner in the works.

8. Meanwhile, In yet another open revolt against his own government, Bharatiya Janata Party MP Subramanian Swamy on recently said that he will file a “private criminal law complaint” against the proposed sale of Air India.

9. Hitting out at the government’s plan, Swamy said, “The proposed sale of Air India is potentially another scam in the making. Selling family silver is not divestment. I am watching who is doing what and will, if I see culpability, file a private criminal law complaint.” 

10. Air India, which has more than Rs 52,000 crore debt burden, is surviving on a Rs 30,000 crore bailout package extended by the previous UPA government in 2012.