No Bids For Air India As Deadline Expires!

The government’s plan to sell Air India has come to an unfortunate end as no buyers have shown interest in the national carrier.

The Civil Aviation Ministry published a tweet at 5 p.m. yesterday, saying that transaction advisors (Ernst & Young) have informed them that they have not received a response to the Expression of Interest (EoI) for the disinvestment for Air India.

Civil Aviation Secretary, Mr. R N Choubey, had released a statement saying that the May 31^st deadline set by the government will not be extended and was confident that they will receive bids for the airline.

The deadline for potential buyers to submit a response was extended from 14th May 2018 to 31st May 2018.

Here are some of the reasons that may have put off potential buyers –

• The new buyer would have had to take over 61 percent (or Rs 33,392 crore) of the debt burden.
• They would have had to accommodate Air India’s 27000 strong-workforce.
• The Government would have retained 24% stake in the airline.
• A rise in crude oil prices globally.
• The general elections being held in 2019.

Industry experts have said that the government needs to tweak its terms of sale if they want the airline to be privatized, however, with only a few months left to the general elections, the possibility of that happening is looking bleak. They have also said that offering the entire equity would be a wiser option as private players want no government intervention.

The government will take Inputs from Ernst & Young on what went wrong and will decide what further action has to be taken.

They will also discuss the airline’s expansion plan about adding more airplanes and routes to their network, which were put on hold due to the planned disinvestment.