Mumbai: A group of 219 Air India employees submitted a bid to purchase 51 per cent of the loss-making state-owned carrier.
The remaining will be held by a financial partner, according to Meenakshi Malik, who is Air India's commercial director and has been with the airline for about 30 years. Each employee will have to contribute at least 100,000 rupees ($1,360) toward the bid.
Air India has been on sale since 2017 when Indian Prime Minister Narendra Modi's cabinet signed off on a plan to sell all or part of the debt-ridden carrier. The government sweetened the deal earlier this year when it extended the bid deadline to December 14 from October 30, saying potential suitors will be allowed to decide how much of the flag carrier's debt they want to take on as part of the transaction.
The rules before that required bidders to take over the carrier's $3.3 billion of aircraft debt, deterring buyers.
"We always believed Air India can be a profitable set up," said Malik. "The government has removed a huge part of the debt, so we thought who better than us? We know the airline inside out, we know where the problems are. We're not bidding to win or lose, we're doing it because we believe we can run the airline well."
Air India has been unprofitable since its 2007 merger with state-owned domestic operator Indian Airlines Ltd., and has relied on taxpayer money to keep flying, with the bailouts adding to the pressure on already strained government finances.
The airline, which began operations in 1932 as a mail carrier before winning commercial popularity, saw its fortunes fade with the emergence of cut-throat low-cost competition. The carrier's entire debt totals more than $8 billion. The government didn't find a single bidder when it tried to sell the company before.
A legacy bid?
That said, the the airline does have some lucrative assets, including prized slots at London's Heathrow airport, a fleet of more than 100 planes and thousands of trained pilots and crew. Malik said a financial partner had already been found, without disclosing that entity's name.
Employee participation has come from "the most junior employees to the most senior board members," she said, without elaborating.
US-based Interups Inc. plans to bid with the employees, according to Interups Chairman Laxmi Prasad. "We are giving an open offer to employees of Air India to substantially own the airline," he said on Monday. "Our group will invest the entire monies required for the airline, with no capital requirement from employees to contribute into the acquisition effort."
Prasad said that after the acquisition, Interups planned to split the assets into "operational and infrastructure" and raise sufficient capital so the airline can "regain its glory and fly high".
Tata Group is also said to have submitted an expression of interest for Air India over the weekend, the Times of India reported. Its interest was submitted via AirAsia India, in which Tata Sons Pvt Ltd. has a significant majority stake.
Singapore Airlines Ltd., with which Tata Sons operates full-service airline Vistara, won't be part of the bid in the initial stages, according to the report.