It has been only downs for Air India. Caught in a tight-jacketed financial bind, the airline started its downhill journey a long ago and if nothing is done to revive its fortunes by the end of this financial year, India could bid farewell to the iconic national carrier. A report
If there is one symbol that the Narendra Modi-led government would like to keep behind closed doors it is Air India’s Maharaja. However well-intentioned the proposal to divest Air India might have been, the scenario is similar to Hamlet’s “To be, or not to be: that is the question” dilemma. Only this time around it is simply: “To sell or not to sell: that is the question”.
The question apart, the fact remains that the conditions attached to the sale scared the potential bidders leaving the government in a Catch-22 situation: keeping the Maharaja alive would be drain taxpayers’ money and closing it down would take its toll on its employees.
All this was because despite the efforts of the Civil Aviation Ministry, not one bidder showed interest in Air India till May 31, the deadline for the ‘Expression of Interest’ (EOI) bids under AI's divestment process. In fact, the government had clarified details in its EOI on May 1: these included plans of retaining the 24 per cent stake in the divested entity, provision of ESOPs (employee stock ownership plan) and on the total debt and liabilities that were expected to remain with AI.
Ernst &Young, the government’s disinvestment adviser for Air India, gave three reasons for the no-show of bidders: a) Government not willing to part with 100 per cent of the carrier; b) Keeping the present set of employees; and, c) Running the airline by proxy for the first three years. A question then that keeps popping up is: Shouldn’t Ernst & Young have advised the government after due diligence? Shouldn’t the adviser given proper warning?
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