Air India sale unlikely if price not right: Secretary

The government may not sell Air India if it does not get the right price, aviation secretary RN Choubey told reporters on Tuesday. “The government retains the right to sell or not to sell Air India if the bid price is found to be inadequate,” Choubey said.

The government has proposed to sell its 76% stake in Air India along with low-fare subsidiary Air India Express and a 50% stake in AISATS, a ground handling joint venture with Singapore Airport Terminal Services, as a single entity. It plans to decide on the highest bidder by August and hand over the national carrier to the new owners by the end of December.

The highest bidder will have to meet the ‘substantial ownership and effective ownership’ criterion and get security clearances before the stake sale takes place.

The government is also in the process of deciding the floor price, or the minimum amount it expects from the sale. It has hired consultants to decide on the enterprise value and asset value for the airline, which will be used to arrive at a minimum value of the carrier. Several private equity funds and international airlines have evinced interest in the carrier.

But Indian airlines such as Indi-Go and Jet Airways have pulled out of the race.

Global investors, including USbased International Finance Corporation and Warburg Pincus, and Singapore’s GIC and overseas airlines Etihad Airways, Singapore Airlines, Lufthansa and International Airlines Group, the owner of British Airways, have evinced interest in bidding for Air India.

The government, which has transferred all non-aeronautical assets of Air India like the Air India building in Mumbai, has decided to sell Alliance Air, Air India’s ground handling company and Air India’s engineering subsidiary separately.

Employees’ unions are protesting against the privatisation move. But Choubey said rights of the employees will be protected even after the privatisation. “We are trying to convey it to them,” he said.