Thursday Nov 07, 2024
FT
Thursday Nov 07, 2024
Monday, 15 January 2018 00:00 - - {{hitsCtrl.values.hits}}
NEW DELHI (Reuters): India cleared a proposal last week to allow foreign investors to own up to a 49% stake in state-run carrier Air India, paving the way for global airlines to bid for the loss-making flagship carrier.
It brings Air India, which previously had to be fully locally owned, in line with the country’s other local airlines in which foreign investment is allowed.
India allows 100% foreign investment in its other local airlines, but caps foreign airlines’ stake at 49%.
In Air India, it will now allow a maximum of 49% foreign ownership including that by airlines. But substantial ownership and effective control of Air India must remain with an Indian national, the government said in a statement.
Prime Minister Narendra Modi’s cabinet gave the go-ahead last year to sell Air India, after successive governments spent billions of dollars in recent years to keep it going. However, it has yet to decide what to do with the carrier’s debt burden of $8.5 billion.
Leslie Thng, chief executive of Vistara, a carrier owned by salt-to-steel conglomerate Tata Group and Singapore Airlines Ltd , last week said the companies were “open to evaluating” a potential bid for Air India.
And companies, including low-cost Indian carrier IndiGo, owned by InterGlobe Aviation, Tata Group and Turkey’s Celebi Aviation Holdings, have expressed an interest in buying some of Air India’s various businesses.
The government also allowed 100% foreign direct investment (FDI) in single-brand retail via automatic route and eased a rule on 30% mandatory local sourcing of products for five fiscal years after the opening of the first Indian store.
NEW DELHI (Reuters): India’s Tata Group and Singapore Airlines are open to potentially bidding for the indebted carrier Air India, a top official at a joint venture owned by the firms said on Friday.
Air India, which was founded in the 1930s by the Tata Group and nationalised in 1953, is saddled with a debt of $8.5 billion. The Indian government agreed last June to sell it, after multiple efforts to resurrect the business failed.
Leslie Thng, chief executive of Vistara, a carrier launched jointly by the Tata Group and Singapore Airlines in 2015, said in response to a question at a news conference that the companies were “open to evaluating” a potential bid for Air India.
“They keep an open mind,” Thng said, without elaborating.
It was not immediately clear if the companies might bid jointly or separately.
Several private domestic carriers have expressed an interest in buying the beleaguered airline, which still has about a 13% market share in India, and is the country’s third biggest carrier, according to analysts and government reports.
Tata Group Chairman N. Chandrasekaran said late last year the company would be interested in bidding for Air India.
Vistara’s Thng, at the conference, also said the group would lease five more A320neo aircraft by June 2018. Vistara currently has a total of 17 aircrafts on lease including four of the fuel-efficient A320neos.
