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Aviation wrap: Government to soon announce new owner of Air India; MAX resumption likely from Oct 5

Mini

The current environment at the aviation and finance ministries indicate that an announcement on the winning bidder for Air India is expected soon, possibly over the next week.

Aviation wrap: Government to soon announce new owner of Air India; MAX resumption likely from Oct 5
The past week has been rife with excitement building up to the announcement of the winning bid for Air India. The government had received “multiple” financial bids for Air India on Sep 15 in its third attempt to sell the carrier.
The pool of bidders include Tata Group and SpiceJet CMD Ajay Singh in his personal capacity, senior government officials have indicated. However, the Tata group is the leading contender to buy Air India, as per multiple people aware of the matter.
The standard operating procedure mandates the winning bid to be approved by Air India Specific Alternative Mechanism or the panel which has been formed for Air India divestment under the leadership of Home Minister Amit Shah.
The panel also includes Finance Minister Nirmala Sitharaman, Commerce Minister Piyush Goyal, and Aviation Minister Jyotiraditya M. Scindia. The government has agreed on a reserve price or the minimum bid value for Air India after presentations were made by the valuation advisor and transaction advisor.
The current environment at the aviation and finance ministries indicate that an announcement on the winning bidder for Air India is expected soon, possibly over the next week. The government aims to completely hand over Air India to its new owners by December.
While several media reports have quoted the reserve price to be between Rs 10,000-20,000 crore, senior government officials have refrained from officially commenting on the matter. If the Tata group does become the new owner of Air India, then life will come a full circle for the national carrier as it was JRD Tata who founded Air India as Tata Airlines in 1932.
The airline was renamed as Air India in 1946 when it became a public limited company in 1946 and JRD even remained as Air India chairman until 1978 and even Ratan Tata was at the helm of Air India between 1986 and 1989.
The Tata group was also among the potential bidders when the government tried to sell some stake in Air India in 2001 and 2017, respectively. This time, if this deal was to go through then there is a possibility of combination of synergies between Tata’s full-service carrier Vistara and Air India and between Tata group’s budget carrier AirAsia India and Air India Express. For now, everyone in the aviation sector is curious about who the new owner of Air India and how will this divestment process be implemented.
MAX resumption
Simultaneously, SpiceJet is getting ready to resume Boeing MAX operations next week, most likely from Oct 5. The airline currently has 13 such aircraft in its fleet and has already re-trained some of its pilots for operating the Boeing 737 MAX aircraft. The aircraft had been banned worldwide since March 2019 due to two fatal accidents involving the aircraft type.
The aircraft boasts of better fuel efficiency and thereby, lower costs for the operator. In fact, industry sources also indicate that Jet Airways 2.0 and upcoming airline Akasa Air is also considering inducting MAX aircraft in its fleet. So, the next week is likely to initiate a new innings for Boeing MAX in India and the Maharaja airline.
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