Companies

Air India to retain name post-divestment

Ashwini Phadnis | | Updated on: Feb 12, 2018
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Govt may shed 51-76% stake in the airline

State-owned carrier Air India will retain its name even after the government divests it stake in the airline. It is reliably learnt that retaining the name is one of the conditions that the government will lay down for prospective bidders. The erstwhile Tata Airlines became a public company and was christened Air India in 1946.

As part of the disinvestment process, the government is considering divesting between 51 per cent and 76 per cent stake in the airline, sources indicated. Despite divesting over half its stake in the airline, the government will ensure that the new owner will be able to make use of Indian air services bilateral rights as the government will lay down that Substantial Ownership and Effective Control of AI remains in Indian hands and on Indian shores.

A clearer picture on the roadmap for divesting Air India will emerge in the next few days when the Expression of Interest for prospective bidders is released. Sources indicated that the government is considering releasing advertisements globally to attract international airlines though it will not do any road shows.

A committee in the Ministry of Finance, which is spearheading the divestment process, will decide on the reserve price for the airline, sources said. The reserve price will be the basic price below which the government will not accept the bid from a prospective bidder.

Jayant Sinha, Minister of State for Civil Aviation, had recently told newspersons that apart from IndiGo, a foreign airline had also sent a confidential letter showing interest in Air India’s airline business. The Minister had declined to say from which region or part of the world the foreign airline was.

The successful bidder will be announced by end-June and the entire legal process of privatisation of the airline will be completed by December.

The brand name Air India has undergone very few, though substantive changes, over the years. For example, in 2005 the airline’s management decided to drop the hyphen between Air and India, a move which helped the airline be drawn up further ahead of other global airlines in the reservation systems around the world.

Published on February 12, 2018

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