The Indian government has finally unveiled the details of its planned sell-off of debt-laden national carrier Air India.
The government will offload up to 76% of the airline and hand over management to the successful bidder.
The new owner will get AI’s fleet of planes, prime landing slots and about US$5 billion of the airline’s current debt.
The preliminary information memorandum showed the sell-off will include 76% of the mainline airline brand, the entire Air India Express budget brand and 50% of airport service unit Air India SATS.
The government has set minimum criteria for bids including net worth which rules out all Indian carriers except market leader IndiGo, although they are permitted to bid in cooperation with a foreign carrier.
IndiGo is the only domestic entity which has so far officially signalled its intent to bid.
One unidentified foreign company has said it plans to make a bid.
The winning bidder is expected to be announced in September.
Other conditions include a pledge to retain staff for at least one year, and the Air India brand must continue to operate as a separate brand for three years.
The new owner may have to go public with an IPO which may give the government the opportunity to offload its remaining stake at more favourable terms in the future.
