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Regular-article-logo Monday, 09 June 2025

GOVT BID TO CLEAR AIR ON AIR-INDIA BIDS 

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FROM JAYANTA ROY CHOWDHURY Published 15.12.00, 12:00 AM
New Delhi, Dec 15 :    New Delhi, Dec 15:  The war that seems to have broken out among Air-India's prospective suitors is giving the father of the bride some sleepless nights. The government is perturbed by the fact that rival business houses, keen on walking down the aisle with the bride, are spreading misinformation to slight or improve each others' chances. Disinvestment minister Arun Shourie told The Telegraph on the sidelines of a luncheon party hosted by rural development minister Venkaiah Naidu here today, that he 'felt rival companies were spreading misinformation' in a bid to hurt each others' chances. 'We are sending out letters to shortlisted bidders for the Air-India disinvestment now.. There is going to be no fresh bidding nor is the list of shortlisted bidders anything like what is being bandied around,' Shourie said. Soon after Shourie's statement, the government selectively released some details of the list of those shortlisted which included virtually every company of consequence who had bid. Except for three small players, which included the Indian Pilots Guild, almost all players including Tata-SIA, Videocon, the Hindujas, L. N. Mittal and the Delta-Air France combine have been shortlisted for Air-India. Eight bidders are in the fray for Air-India and five for Indian Airlines. Two bidders for Indian Airlines have also been rejected. Initial details of their business plans and consortium details have to be submitted by those successful, by January-end, 2001. However, the final price-cum-technical bids can take another two-to-six months and the transaction itself was likely to be completed by the first half of 2001. Obviously the government which had earlier announced it would not officially release the list was forced to retract, worried by media reports which suggested the Tata-Singapore combine had the upper hand in the disinvestment shortlisting and others in the race such as Hindujas, L. N. Mittals and Emirates Airlines are being quietly dropped. Other reports suggested the government's advisors to the divestment process want a second round of bidding to get a better price for the national flag carrier. Further, a battle between civil aviation minister Sharad Yadav who is against Air-India being sold off, especially to any foreign airline and the Prime Minister's Office, which is keen on the move, has also been alluded to in the reports. Air-India itself is no pretty bride. It turned up a net loss of Rs 75 crore last fiscal, the fifth consecutive year it posted a loss. It has 26 ageing planes, most of which need to be replaced. And it has the world's highest employee-to-aircraft ratio of over 680 workers for every plane it owns, whereas most airlines have less than 100 employees to a plane. Nevertheless, the suitors are flocking to the ailing Maharaja due to the huge number of unutilised flying rights that the airline retains and the fact that its total fixed asset value is still an awesome $ 2.7 billion.    
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