10 reasons why Air India has no buyers



The Government of India had approved privatisation of the debt-laden national carrier Air India last year.

However, so far, none has showed interest in the deal.

Here are the 10 reasons why no buyer is showing interest in the national carrier:

1. The government is retaining 24% of direct stake in Air India. A Centre for Asia Pacific Aviation (CAPA) report says, this is leading to lack of confidence in buyers who are fearing government prying and political interference in their business.

2. AI is stooping as low as possible under its debt-burden and huge losses which may take the buyer years to turn the airline around.

3. As on March 31, 2017, its total including current liabilities amounted to Rs 33,392 crore. On March 31, 2018, it crossed Rs. 50,000 crore, reported MoneyControl.

4. AI suffered a net loss of Rs 5,765.17 crore during 2016-17.

5. Bidders are also apprehensive about the lack of transparent employee-retention clause and several unions protesting against divestment of the airline. Pertinently, Air India and its subsidiaries have over 20,000 employees on payroll.

6. The low market share is also putting off bidders. Directorate General of Civil Aviation report for April 2018 shows Air India holds only 13.3% market share with a mere 45.06 lakh passenger load, while IndiGo topped the report with 39.7% market share with 1.34 crore passengers.

7. An additional drawback is the high number of complaints. As per the traffic data report , in April 2018 there were 263 complaints per 10,000 passengers Air India carried.

8. A forever rising price of crude oil is adding to the woes.

9. However, among the few benefits of investing in Air India is that if a foreign airline invests in the national carrier, they will have access to major national and international air routes, including Afghanistan, Australia, Italy, Bahrain, Canada and France.

10. Besides, Air India has authorised Hangar spaces and Parking Rights in all major airports across the world.

Big Wire

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Most Popular

To Top