Air India Sale Hits Turbulence
TRUST THE CIVIL aviation bureaucracy to turn a good idea upside down. Air India’s proposed sale is one of the Narendra Modi government’s most sensible policy decisions. Burdened with unserviceable debt, a once-proud airline has been brought to its knees over decades of neglect. Its lucrative Gulf routes were given away to carriers from the Middle East. Successive chairmen – all bureaucrats with no domain knowledge of aviation – oversaw falling service standards and flight delays.
The decision to sell the airline was finalised nearly a year ago and IndiGo Airlines immediately showed interest. The Tatas (in partnership with Singapore Airlines) and Jet Airways too were keen to buy Air India (AI). Despite its debt overhang and annual losses, the airline had great underlying assets: profitable subsidiaries, legacy landing right at airports like London Heathrow, a large fleet of aircraft, and prime real estate across the country.
The Minister of State for Civil Aviation Jayant Sinha was initially upbeat. He said the sale would go through. There were buyers in India and abroad.
Half of the airline’s debt burden could be retained by the government, he said, and investment banks would soon be invited to bid for the mandate.
But within weeks the mood turned dark as the government unveiled its “conditions” for AI’s sale. They were so onerous, so filled with 1970s bureaucratese and in many ways so irrational that the bidders quickly lost interest. IndiGo Airlines was the first to say it wasn’t interested in Air India anymore. The Tata/Singapore joint venture and Jet Airways followed suit. The civil aviation ministry has put up a brave face but it’s clear that unless the conditions of sale are significantly changed, AI’s divestment will be a non-starter.
Bu hikaye Businessworld dergisinin May 12, 2018 sayısından alınmıştır.
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Bu hikaye Businessworld dergisinin May 12, 2018 sayısından alınmıştır.
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