A consortium of Air India employees has failed to qualify for the next round of privatization of the national carrier Air India. A consortium of Air India employees had presented an expression of interest (EoI) in the privatization of the national carrier but failed to make the cut.
The airline’s commercial director, Meenakshi Malik, who led the ambitious pursuit of the employees to take over the state-run carrier, stated in a three-page letter addressed to employees that the consortium had not been shortlisted.
In her letter she stated, “As of late last night, I have seen an email from the transaction adviser to the government of India (Ernst & Young LLP), informing the Employees of Air India that we have been unsuccessful in qualifying to the next phase of the ‘Disinvestment Acquisition process’,”.
Though the government did not approve the consortium’s bid, it did provide a detailed analysis of mistakes behind the disqualification of the bid. The letter spelt out three reasons behind the disqualification of the consortium’s bid.
These were, non-submission of required three years audited financial statements for foreign consortium member, non-submission of information or details by interested bidders for investments in offshore companies, which forms a substantial part of the net worth of the foreign consortium member, and the foreign consortium member not being an appropriately regulated foreign investment fund as defined in the preliminary information memorandum.
Malik expressing her disappointment and stated in her letter that “It was certainly upsetting to read this, but what I found reassuring in the email is that the government had no objection or reservation whatsoever with any of the documentation furnished on behalf of the employees,”.
Thus the expression of dejection and not disapproval of the government’s authenticated process of disinvestment of the national carrier speaks well of the government’s transparency and authenticity of proceedings.
Adding to her letter she hailed the sincerity and dedication of the employees and further appreciatively commented on the infallible employees’ documentation and maintained that “this can only mean that the employees’ documentation was, in fact, perfect, which is a clear reflection of not just our sincerity in the process but also of our competence to have participated and, if selected, to run our airline,”.
Another bidder in the run to own the national carrier is the Tata Group which reportedly owns 51% stake in Vistara airlines and budget carrier AirAsia India. Tata Group also has reportedly presented its Expression of interest (EoI) for cash strapped carrier.
Air India presently has third largest market share in the domestic markets, making 9.4% of the total traffic. Experts believe that Tata Group has a fair chance to of bagging the deal along with its subsidiary Air India Express.
Tata Group’s bid will help it increase its market share to 22.9% overtaking SpiceJet that owns 13.4%. The deal would make Tata Group airline business to emerge as second largest airline group after Indigo which owes 55.5% of the market share. Reportedly, Ajay Singh, the promoter of budget airline SpiceJet Ltd, is also said to be in the race.
The government aims to complete the privatization of the national carrier in the next fiscal. The department of investment and public asset management (Dipam), which works under the finance ministry, has maintained that the identity of potential bidders will be kept confidential with the transaction advice.