From the Swadeshi Jagran Manch (SJM) to businessman Anand Mahindra, the Centre is receiving free ideas on how to get the Air India divestment process moving.

On Thursday, the Centre said it had not received even a single bid for the 76 per cent stake that it proposes to divest in the national carrier.

The SJM will come out with a report in two weeks to suggest various divestment options for Air India, including an IPO, said the organisation’s national co-convenor Ashwani Mahajan on Friday.

Mahindra Group Chairman Anand Mahindra, meanwhile, said the Maharaja’s crisis ought to be turned into an opportunity, but only after a turnaround. He also mooted appointing a government official “with the potential and passion” of E Sreedharan (former MD of Delhi Metro Rail Corporation) as the Chairman and CEO of the airline.

Some analysts think the Centre should go in for a reverse auction: write off Air India’s entire debt and invite financial bids based on the potential that interested parties see in the airline.

The Centre for Asia Pacific Aviation (CAPA) suggested a comprehensive restructuring of Air India under a special administration, to be followed by 100 per cent divestment with less complex terms.

“Dropping the divestment case post this failure will be unfortunate. Expect the government to quickly address structural issues and resume the process. The cost to the taxpayer will be massive with continued government ownership; even in an election year, expect strategic clarity from the government,” said a CAPA statement.

Yet there are others who feel it is too late to do anything. According to a market analyst, the best time to privatise Air India was in the second year of this government. “They waited too long. It was clear in 2015 that the government was ready to privatise but the decision was taken only in 2017; the delay proved fatal,” he said.

On the contentious issue of dealing with Air India’s workforce, analysts feel that instead of burdening the new owner with a VRS, the surplus staff could be absorbed in another PSU in need of staff.

What put them off

While there is no official word on why no bid was received, the speculation is that the issue of the airline’s workforce and the government retaining a stake even after divestment were dampeners for investors.

Many feel that if the divestment had been handled by the Ministry of Civil Aviation, the chances of its going through would have been brighter, as the Ministry knows the nuances of the sector. Instead, it was handled by the Finance Ministry’s Department of Investment and Public Asset Management.

Clarity on the Centre’s plans may emerge in the next few days. Observers say the airline’s sell-off document may be modified and reissued, as was done with Pawan Hans, the state-owned helicopter company that the Centre is looking to divest as well.

Related Topics