Indian private sector airline, Jet Airways is considering to place bids to buy the ailing state-owned Air India airlines and privatize the airlines while expanding their work-efficiency and business.
Naresh Goyal-led Jet Airways, being India’s oldest private airline, is considering bidding to buy Air India. Talking about this, Jet Airways’ Chief Executive Officer (CEO) Vinay Dube said, “I think we need clarity on what the government’s position is. Once we get more clarity, we will have an opinion” – when asked about the airline is considering a bid. Upon this, the government is expected to release the broad contours of Air India’s privatisation in the next few days. To disclose the strategic disinvestment of the loss-incurring carrier, the government is expected to invite Expression of Interest (EoI) from bidders.
This is the first time Jet Airways has formally indicated interest in the “Maharaja” of Indian airway sector. Earlier this month, reports suggested that a consortium of Jet Airways, Air France-KLM and Delta Airlines had expressed interest in the national carrier’s planned disinvestment. However, the airlines is waiting for the government to reveal how much stake the administration would look to retain in the airline, if at all. It will also detail the number of units it would be split into, before being sold.
If reports are to be believed, the government could retain 26 percent stake in the national carrier, according to the report. Earlier, the government had allowed foreign investment of up to 49 percent in Air India. The offer could also include the government making it mandatory for Air India’s eventual buyer to list the airline on the stock exchanges in three to five years. In case the majority shareholder refuses to launch an initial public offering, the government may want to keep the option of selling its stake via a public offering. As such, the key question is how Jet will manage the resources to fund an Air India buyout.