Air India will not be broken up for sale

A few months ago, we talked about the upcoming Air India sale process and IndiGo being one of the first suitors turning up to show up. Since then, the process has moved at a snail’s pace. Somewhere last month, we heard for the first time about the team of investment bankers and advisors being announced. I was never sure about the airline being sold off by March 2018, but now the government accepts the fact too.

a large airplane on the runway

There have been a few decisions made along the way, however, and some of these are important milestones in the sale process.

  • The Government of India stated yesterday that they will not carve out the operations of the airline. This was something IndiGo was looking forward to doing, as in cherry pick their international operations and acquire that specific part.
  • The Government has also said that they are identifying which subsidiaries of the airline will be sold separately. Essentially, this means that the hotels and the landbanks and the ground handling and so on could go to separate people. There are five subsidiaries up for sale, which includes Air India Express, Alliance Air, Air India Air Transport Services (the ground handling co.), Hotel Corporation of India (Centaur Hotels), and Air India Singapore Air Transport Services (AISATS). Just not the airline. It is going in one piece.
  • The government is looking at how to slice out the debt of the airline, which of course, is the reason no one is excited at all about this sale process. This massive liability is the elephant in the room no one wants to talk about. They have now hinted that they may take away a part of the debt from the airline before selling it off, but till they play their cards, I don’t expect any other suitor to come forward to buy the airline.
As of now, IndiGo wants to acquire the airline and Gurugram based Bird Group wants to take over AIATSL. SATS wants to take over the remaining part of AISATS.


The Government, or at least the minister-in-charge of Aviation, fully expects Jet Airways and SpiceJet to bid for the airline, given ,he states that 14% domestic and 17% international market share is not something to look away from for any carrier who is in the space. Of course, everyone will take the documents from the government for the airline, because who does not want to pour over a competitor’s information and learn something about it’s working, even though it is not the best in class.

So clearly, we need to wait and see now how Air India will fly away, and who will take it on? Do you have any thoughts in mind about how Air India should be sold?

About Ajay

Ajay Awtaney is the Founder and Editor of Live From A Lounge (LFAL), a pioneering digital platform renowned for publishing news and views about aviation, hotels, passenger experience, loyalty programs, travel trends and frequent travel tips for the Global Indian. He is considered the Indian authority on business travel, luxury travel, frequent flyer miles, loyalty credit cards and travel for Indians around the globe. Ajay is a frequent contributor and commentator on the media as well, including ET Now, BBC, CNBC TV18, NDTV, Conde Nast Traveller and many other outlets.

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  1. Will this mean the end of * Gold benefits on AI? Assuming that happens, there won’t be a Star Alliance carrier left in India. Sad.

    • @PM1, I don’t think that they will withdraw from Star Alliance, given the airline will be held intact. No one wants to go through the whole process again.

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