New Delhi ready to sell its entire stake in Air India, which owes US$8 billion
- National carrier has been haemorrhaging money for more than a decade and struggling to pay salaries and buy fuel
- Prime Minister Narendra Modi’s government has been divesting money-losing assets to manage the fiscal deficit
The airline, which owes more than US$8 billion, has been struggling to pay salaries and buy fuel, with officials recently warning it would have to shut down unless a buyer was found.
On Monday the civil aviation ministry released a document inviting bids for a 100 per cent stake, setting March 17 as the deadline for initial submissions. Potential buyers would have to assume around US$3.26 billion in debt, the document said.
Founded in 1932 and formerly India’s monopoly airline, the company was once known affectionately as the “Maharaja of the skies”. But it has been haemorrhaging money for more than a decade and has lost market share to low-cost rivals in one of the world’s fastest-growing but most competitive airline markets.
In November aviation minister Hardeep Singh Puri had said the airline would “have to close down if it is not privatised”.
State-run oil companies halted fuel supplies to Air India in August after it fell behind on payments, though the firms agreed to lift the suspension a month later after talks brokered by the government.
The country’s aviation sector has been stuck in a slump since the collapse of Jet Airways last year.
Substantial ownership and effective control of the airline must remain with an Indian entity, the government also said.