Around 150 players have shown interest in the Air India privatisation process, made queries and sought clarifications on the terms of the flagship carrier’s sale. These include both foreign and Indian airlines, as well as a number of domestic and external non-aviation entities, Business Standard has learnt.

A new owner of Air India will be allowed to operate the airline under a holding company. The entity will also be permitted to co-opt its existing airline brands under the holding company to build synergy.

This, the government believes, will allay concerns of potential suitors about the bidding condition, which mandates operating Air India at arm’s length for three years.

Amid reports of Indian civil aviation companies being lukewarm to buying Air India, the government says it has received many queries from a number of aviation and non-aviation companies for the flagship national carrier.

The queries have been addressed to EY, the transaction advisor for the sale of Air India, Air India Express, and the flagship’s 50 per cent stake in Air India SATS. The last date to submit queries by interested parties was April 16.

Air India has ordered a probe into the complaints that one of its senior pilots threatened to hit his co-pilots with 'crash axe' at least on two flights, the sources said.

While ordering probe, India's national carrier also directed the senior pilot not to perform his duties as an instructor till further orders. His 'trainership,' however, was restored last week.

Rashtriya Swayamsevak Sangh (RSS) chief Mohan Bhagwat said on Monday Air India should be handed over to an Indian company and foreign investors should not be allowed to participate in the national carrier’s disinvestment.

“If the problem is that Air India has not been run properly, hand it over to someone who can do it and it should only be an Indian firm,” he said.

The government’s decision to retain a 24% stake in Air India after the sale of 76% is deterring prospective buyers from bidding for the bankrupt airline, sources said. A 24% stake would give the government two nominees on the board which would mean continued interference in the running of the business, they said. While both domestic and international airlines were looking forward to the divestment of Air India, the conditions for the sale are onerous, they pointed out.

Disinvestment-bound Air India registered around 11% growth in revenue, as the airline’s fiscal and performance parameters were good in the last financial year, according to its chief Pradeep Singh Kharola. The loss-making national carrier also recorded 80% passenger load factor in 2017-18 amid the government preparing for its strategic disinvestment. Kharola said on Thursday that the performance parameters of the airline had been good in the last financial year.

The Tata Group, widely seen as a potential suitor for Air India, is unlikely to consider a bid for the carrier as the government’s terms are just too onerous, two sources said. India, keen to sell the loss-making, debt-ridden airline, finalised plans in late March to divest a

76 per cent stake and offload about $5.1 billion of its debt.

Jet Airways reportedly has decided not to participate in bidding for stake in national carrier Air India. According to a report in Business Standard, the Jet Airways management had held discussions with its alliance partners Air France-KLM, Delta, and other investors to put up a proposal. But the airline has now decided to call off its efforts.

The government will not look at making any revisions to the transaction details for the divestment of Air India, sources told FE, as it is seeing enough interest from prospective overseas bidders. This assumes significance in light of homegrown budget airline IndiGo, the first airline to express its interest in buying into the ailing national carrier, pulling out from the race citing its inability to turn around the airline and consummate the deal in its current form.

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