Aviation consulting firm Centre for Asia Pacific Aviation (CAPA) has asked the Centre to amend the terms in EoI (expression of interest) — particularly for labour and debt — to attract more bidders for the debt-laden Air India (AI).
“Successful bidder will need to invest in restructuring and absorbing losses for several years, in addition to consideration paid for 76%[stake] . So, terms in Expression of Interest (EoI) relating to labour and debt need to be amended,” CAPA said. It said the bidders must be ring-fenced from political risks. “Unless bidders are confident that they will be ring-fenced from possible political risks if successful, this could prove to be a key reason for possible non-participation by some parties at request for proposal (RFP) stage,” the consulting firm said.
Taxpayer funds
Estimating that Air India was headed towards two-year losses of $1.5-2 billion in FY19/FY20, CAPA said failure to divest could see Air India close down operations unless government keeps on spending taxpayer funds. Under these circumstances, it has asked the government ‘to make the offer more attractive to investors.’
