Air India Sale Delayed Again But Will Be Completed In 2021

The sale of Air India has been delayed once again as India battles the second wave of COVID-19. While the government had hoped to wrap up the sale by September, the process will now extend into the winter. However, Civil Aviation Minister Hardeep Singh Puri has made it clear that the sale will be over this year.

Air India Boeing 777
The Air India privatization process has hit been by delays since it began last year. Photo: Vincenzo Pace | Simple Flying

Struggling

The Air India sale process has hit another delay. The second wave of COVID-19 has been devastating for India, with aviation being the hardest-hit industry. Considering this, the Air India privatization has been impacted as well, with the government pushing out the deadline for the sale once again.

According to Mint, Minister of Civil Aviation Hardeep Singh Puri announced the delay to the process and a new timeline for Air India. In a statement, he said,

“Air India is getting disinvested. It will take some time due to the pandemic. I want to assure you that it will happen this year…Air India is still in the debt of 60,000 crore and it’s liable to be sold”

Air India A321 Getty
The government originally hoped to get Air India off its books by June. Photo: Getty Images

The second wave has slowed down the privatization process, with physical meetings and briefings no longer possible. Moreover, both bidders are likely holding off considering the current state of the aviation industry. This has resulted in the government shifting its timeline for selling the airline from June to September to the end of the year now.

Air India hit hard

While the second wave has hit all Indian airlines severely, Air India has particularly been affected this time. Due to the imposition of travel bans by nearly every major market, Air India’s international routes have been reduced drastically. The carrier’s once-profitable long-haul flights, such as to the US and Europe, have seen traffic greatly reduced.

Meanwhile, the airline’s struggling domestic position has also seen lower passenger numbers since March. This means losses have been mounting at the flag carrier, further imperiling its selling price in the coming months.

Air India 777-300ER
Air India’s long-haul routes have been axed due to travel bans, hitting revenues hard. Photo: Vincenzo Pace | Simple Flying

The coming months will invariably see a recovery as India recovers from this wave of infections. Cases have fallen from a peak of 414,000 in early May to 120,000 in early June, a strong recovery. However, domestic and international traffic is yet to pick to anywhere near their pre-second wave levels.

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Who will win?

Currently, the Tata Group and SpiceJet CEO Ajay Singh are the final two bidders for Air India. Both submitted Expressions of Interest (EoI) to the government in December and are currently studying internal Air India data toward submitting a financial bid. However, Ajay Singh’s bid has run into problems, with the government barring him access to confidential data, according to ET.

With the process delayed, Air India may not have a new owner until November or December. However, the government is adamant for the sale to go through, having poured billions into the airline for privatization. For now, keep an eye out for the latest status of the process.

What do you think about the future of Air India? Let us know in the comments!

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