On Tuesday, Jet Airways became the latest commercial airline company to distance itself from the purchase of the government-controlled Air India. This comes on the heels of IndiGo’s decision to publicly pull out of the sale the day before.
In an email to AFP, Jet Airways’ deputy chief executive Amit Agarwal said “considering the terms of offer in the information memorandum and based on our review, we are not participating in the process.”
This leaves the government’s Air India disinvestment plan in disarray as there is no longer a clear front runner for the company. These announcements are particularly disheartening considering the government’s recent decision to accept bids for just 76% of the company, down from the full 100% it had been demanding earlier.
Air India has been bogged with losses since their botched merger with Indian Airlines in 2007. The latest government estimate has the company’s debt at $7.67 billion. This debt has been created due to a combination of their own failure to respond to market demands and the rise of private airlines such as IndiGo.
However, despite these massive liabilities, Air India also retains a fair amount of assets that could be leveraged by the right company. Their prime berths in both domestic and international airports, their extensive infrastructure, and their ownership of ground supply teams would all be useful additions to any Indian company looking to increase their market share.