INSUBCONTINENT EXCLUSIVE:
failed bid, the group of ministers (GoM) led by Union Home Minister Amit Shah is expected to decide the reserve price of the national
carrier and dealing with its large debt.Among other issues are golden handshake to staff reaching a certain age and extending medical
facilities to those who have already retired or would retire in years to come.Official sources said that the government is nearly decided
over a complete exit and making necessary change in eligibility criteria and other terms to align it with the needs of the potential
investors."Major decisions left are fixing the fair price of Air India and handling the debt
Then contours of the disinvestment and retaining employees are other issues," said an official.The meeting schedule of the group of
ministers is yet to be decided but is expected shortly
Apart from Mr Shah, the ministerial panel has Finance Minister Nirmala Sitharaman, Commerce and Railway Minister Piyush Goyal and Civil
Aviation Minister Hardeep Singh Puri as the members.The previous Modi government had dropped the disinvestment plan citing adverse operating
environment with global crude prices rising and rupee weakening against the dollar
The investor sentiment was also tepid
Above all, an impending general election did not make political sense to go for disinvestment of Air India which is generally associated
with the country's pride and sometimes termed as "jewel of the nation".While the country's aviation environment has changed in the last
one year with Jet Airways out of the scene now, experts see prevailing conditions better than May, 2018 when not a single bidder showed
interest for Air India at EoI (expression of interest) level.Kapil Kaul, CEO (South Asia) of Sydney-based Centre for Asia Pacific Aviation
(CAPA) sees the current operating and investment environment better than last year
He sees investors showing interest for the national carrier provided some of their issues are sorted out."Post-Jet Airways closure,
demand-supply dynamics are more stable
Oil is expected to remain under $60 and rupee around 71-72 which indicates favourable trading conditions compared to last fiscal," Mr Kaul
said."Globally, funds are available for the right project subject to favourable conditions for investment," he added.Air India has a total
debt of about Rs 60,000 crore
The cumulative loss of the national carrier is to the tune of Rs 70,000 crore
In the financial year ending March 31, 2019 the airline is estimated to have reported a loss of Rs 7,600 crore.In an earlier decision, the
government had decided to transfer debt of Rs 29,464 crore along with other non-core assets to the newly-created SPV to attract bidder
interest for the carrier.Asked if there would be enough investor interest for Air India this time around, Dhiraj Mathur, partner, PwC said
that it certainly gives a good opportunity to anyone planning to enter Indian aviation
But he sounded cautious about foreign entities lining up for the carrier."With Jet Airways almost out of the picture now, anyone with
aspirations of entering the large and growing Indian market, Air India is a very attractive option
Now, the issue is fair price
Without going into numbers and the books it is difficult to assess the floor price," he said.Mr Mathur noted that a lot of things have
changed from then (when the bid for Air India was invited early last year) and now especially on the global market front."For various
reasons, including the looming trade war there is a lot more uncertainty now than there was earlier
But having said that I am positive
Certainly the fundamental value of Air India has not diminished and it remains a good asset
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