Indian Govt. Halts Repeat Attempt at Air India Divestiture

Citing sources close to the national carrier and its attempted sale earlier this year, Bloomberg reported that plans to attempt the sale of Air India are currently being put on hold by the Indian government, following failure of this earlier attempt. While a committee has been set up to look into what went wrong and how the sale could be effected successfully the second time around, the present focus on this matter seems to have waned. This comes in light of recent reports regarding the airline, India’s national carrier, seeking further infusion of funds from the government and banks to help meet its operational expenses, such as paying salaries due to employees that remained so as of the 15th of June, 2018.


The first attempt at sales in controlling stake of the airline met with failure due to what was believed to be the adamant position adopted by the government in seeking total, as opposed to partial divestment. This made potential investors leery of having to contend with more than they wished to take on, considering the 5.1 billion dollar debt that the airline was trying to offload as part of this sale. When it finally became clear that none of the previously interested parties were as interested in the plan that the government was trying to propose, the deal was rescinded until further notice.


At present, the Indian government has said that it will focus on recovering funds by selling its building in Mumbai, the airline’s aircraft maintenance unit and the ground handling unit. This will happen in tandem with its efforts to improve the operational efficiency of Air India, the flagship carrier of the nation.

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