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Foreign airlines keen on Air India buy, says government official on future of debt-laden carrier

NEW DELHI:  Foreign airlines are keen to acquire Air India, Disinvestment Secretary Tuhin Kanta Pandey told TNIE on Tuesday.

“We have seen sufficient interest from potential foreign buyers, some of them airlines. We can’t name them because of the confidentiality clause,” he said.

“Under existing norms, foreign airlines can acquire only up to 49% in the national carrier. So, foreign carriers wishing to bid will have to be part of a consortium (with Indian partners),” Pandey added.

According to sources, the government may relax the rules to allow higher FDI in aviation.

Meanwhile, there are reports that the Tatas may bid for the airline they founded in partnership with Singapore Airlines.

Aviation analysts say Gulf-based airlines, too, are eyeing Air India, which flies to 41 international destinations and has several scores of unused rights to fly to other foreign destinations with a total of 800 slots for landing at major airports globally.

“Our interactions with prospective bidders were helpful as we understood why many of them did not bid the last time. High debt and continued government shareholding appeared to be the reasons,” said Pandey.

This time around, the government is offering 100% equity to potential buyers and has also promised to pare down debt drastically to Rs 23,286 crore.