The government-owned Air India is the earliest entrant to airline industry in our nation and it is currently reeling under mammoth pile of debt, which stands at $5.1 billion. While private players like Indigo and Spice Jet leading the game, Air India has been struggling to run out of debts and the company has failed to report profits for more than a decade now.
So, the government of India has decided to sell 76% of business rather than relying on tax-funded bailouts with May 14 as bidding deadline. But, nobody has participated in the bidding process and eventually, Civil Aviation had to extend the last date till May 31.
Even then, it could not catch the attention of bidders and finally Air India is likely to go unsold as the Civil Aviation Secretary also confirmed there wouldn't be any further extension to the deadline. But, the department has reportedly received around 160 queries from various organizations about the terms of purchase.
Although Indigo has initially displayed interest to acquire the international operations of Air India, the govt-run airline made it clear that there is no such option available in current divestment plans. Apart from Interglobe Aviation (Indigo), Tata group was also projected to be the possible buyer but there was meager response from them.
Air India, at the time of putting its business on sale, made it clear that winner should not merge the airline with an existing business as long as government holds a stake in it.