Here’s one I didn’t see coming – it looks like Air India staff are urging the government to look closer to home before it agrees to sell the national airline.
Air India employees hope to take over their own airline (with a little help)
The Indian government has long wanted to sell off the national carrier, which is heavily in debt, and is currently inviting expressions of interest from parties interested in taking the airline off its hands.
Aviation journalist Tarun Shukla has tweeted a letter from Meenakshi Mallik, a commercial director at Air India, which was sent to her colleagues at the airline. In the note, Mallik explains how employees are working on a ‘once in a lifetime’ to bid for their ‘Palace in the Sky’.
In the letter, Mallik writes:
‘The Government of India is seeking to divest itself of its shareholding in Air India Limited, and consequently Air India Express Limited and its 50% shareholding in Air India SATS Airport Services Private Limited. Broadly, the project itself entails participating in a bid process along with all other participants who wish to take charge and ownership of AI and its assets. If the media reports are true, we will be bidding against, presumably, some of the largest corporate houses in India who will be just as keen and interested in the airline.’
Mallik goes on to acknowledge that ‘we do not have the necessary wherewithal (read cash!) to participate in this bid process alone’. The employee group has accordingly searched for a private equity fund to support any purchase.
The plan is that the employee consortium would own and control the airline, with a 51% share, while the investment partner would own the remaining 49%.
According to Mallik’s calculations, individual Air India employees would not have to pay more than INR 100,000 (USD 1,353). Mallik also urged her colleagues to avoid media leaks, which she said could ‘jeopardize our bid and chances’ (though it’s not clear how well that’s working out, since her letter turned up on Twitter).
In an emotional conclusion, Mallik signs off:
‘For many, this company is their home and an integral part of their identity. I can personally say that after having spent 31 years in this airline, a large part of the person I am today is a consequence of all my experiences and learning from this company. We have a once in a lifetime opportunity before us now.’
Tata Group considering its own bid for Air India
It sounds as though the employee consortium will have some competition, however, as the Tata Group is also thought to be interested in acquiring Air India.
According to media reports, Tata may bid in the name of Vistara, the joint venture airline it owns with Singapore Airlines. Should Singapore Airlines decide to back out, Tata is likely to press on regardless with a solo approach.
There’s also been speculation that Vistara and Air India would be merged, should Tata’s bid come off. Unnamed Tata officials are quoted as saying:
“Our group chairman has clearly stated that the airline businesses have to be consolidated and there cannot be multiple airlines. So Air India being a full-service carrier, it is only sensible that it will come under the Vistara business which is a full-service carrier too. So we are hopeful that our partner will be willing to participate in the future plans that include Air India.”
If press reports are to be believed, at least two parties are interested in taking over the cash-strapped national airline, Air India.
The first bid comes from a consortium of Air India employees, who would need to team up with private equity investors to raise the cash. A second bid is likely to come from Tata Group, with or without the support of joint venture partners Singapore Airlines.
What do you make of the plan for Air India employees to take over their airline? Would you rather Tata bought Air India and folded it into Vistara?