In a major setback to the Air India disinvestment process, the government said no initial bids were received for the proposed strategic stake sale of the airline by the May 31 deadline, and that "further course of action will be decided appropriately".
Centre for Asia Pacific Aviation (CAPA) has urged the Indian government to embark on a comprehensive restructuring of debt-ridden Air India, which has failed to find a buyer for its disinvestment.
In a major setback to the Air India disinvestment process, the government said no initial bids were received for the proposed strategic stake sale of the airline by the May 31 deadline, and that "further course of action will be decided appropriately".
The government had proposed to offload 76% equity share capital of the national carrier as well as transfer the management control to private players.
The transaction would involve Air India, its low-cost arm Air India Express and Air India SATS Airport Services.
CAPA, the Sydney-based aviation think-tank, said the government should opt instead for complete privatisation.
"Surprised with the outcome as CAPA expected significant interest at the EoI (Expressions of Interest) stage. The next steps should include a comprehensive restructuring of AI under a special administration which can be followed by 100 per cent divestment with less complex terms," CAPA said in a statement.
On Twitter, CAPA said, "Critical that terms in EOI - particularly for labour and debt - are amended, as successful bidder will need to invest in restructuring and absorbing losses for several years, in addition to consideration paid for 76 per cent.”