It has been a week of denials from airlines with no takers for the Mahrajah. After Jet Airways said they will not be looking at participating in the Air India divestment, Dubai- based airline Emirates also denied any plans to acquire or invest in the Maharajah.
Emirates responded to CNBC TV18's email query on whether the airline will bid for the Indian national carrier after the government made the Expression of Interest public.
"Emirates has no plans to buy or acquire any airline. We continue to focus on our organic growth, and will partner with other airlines where it benefits our customers and makes commercial sense," responded Emirates on mail.
This comes as a
major setback for the government's plans to privatise Air India by 2018 end. With airlines like Indigo and Spicejet ruling out bids to buy a stake in Air India, experts remain divided over the future course of this ambitious divestment. Also read: Singapore airlines, along with three others, could bid for Air India debt stake sale
The preliminary report released on March 28 highlighted that the government will sell 76 per cent in Air India and retain the remaining 24 per cent stake. Moreoever, the new entity will have to take over a debt of Rs 33,392 crore and retain the "Air India" brand name.
Amber Dubey, head Aerospace and Aviation, KPMG India said in an interview to CNBC TV18 that the only way to get investors on board is to resolve the Rs 33,392 crore debt concerns amd revise certain terms.
"No airline in India or abroad can take over debt of about Rs 33,000 crore. And no company would like to take over 10,000 employees. The people and debt issues need to be revised," said Dubey.
Dubey adds that a non airline group will not be able to turnaround the new Air India due to lack of adequate expertise to run an airline.
While Dubey is not enthusiastic about a positive response to the divestment, CAPA India believes there will be significant interest. Kapil Kaul of CAPA India said he would not like to subscribe to speculations around Air India right now.
"Its a complex transaction. One can look at reducing debt profile but labour and branding are critical issues. I believe the government will have an open mind and will be flexible in revising labour and brand terms," said Kapil Kaul.
Sources in the government say they remain confident that Air India stake sale will be a success. "We dont see any reason why it wont be a success. We dont intend to disclose who all have shown interest its confidential as per DIPAM's (Finance ministry's divestment arm) divestment rules," said an official on the condition of anonymity.
On asked whether terms will be tweaked to lure airlines, the official added the government will go ahead with the divestment under current terms for now.
CNBC TV18 also approached global airlines namely British Airways, Singapore Airlines and Lufthansa regarding their interest in Air India. Reports suggest that the airlines have been in talks with the government.
Singapore airlines gave an open ended response by saying that their priority is to expand Vistara but they won't rule out Air India. "We will keep our options open with respect to the proposed divestment of Air India," said Singapore Airlines in response to CNBC TV18's query.
The German airline responded by saying they dont comment on market speculation and that "India is a strategic market for Lufthansa Group and we are committed to increase our offerings by introducing our latest and most innovative products and services and by providing unrivalled connectivity."British Airways also said they do not comment on "rumour or speculation."