Few takers for Maharaja: Global roadshows for Air India get tepid response

With just four days to go for the deadline to submit an expression of interest (EoI) for Air India, the government is waiting to hear from likely suitors. The last leg has been action-filled with top executives of consultancy firm EY, the transaction advisor for Air India disinvestment, flying across the world over the past three weeks to generate interest among the big aviation players in Europe and Asia.

The government is yet to receive a single formal EoI for the airline. The window closes on May 31, unless the government extends the date once more. The date was extended once from the initial deadline of May 14.

The EY teams are understood to have met executives of Air France-KLM, Lufthansa, and Singapore Airlines across Amsterdam, Frankfurt, Singapore, and New Delhi. There have been multiple meetings and presentations with the management of some of the airlines, including Lufthansa, a source said.

The transaction advisors have been holding road shows over the last few weeks to explain the sale process and understand what the sellers want, a government official involved with the privatisation process said. “They have met officials of all global airlines,” he said.

Road shows are common ahead of a company raising money through public listing or while trying to find a suitor for an entity to be sold.

“We feel that we have produced an attractive product to sell. However, with a lukewarm interest from bidders, there is a renewed effort by the government to understand the demands of prospective suitors,” the official quoted above said. “Since rules debar government officials from engaging in such discussions during a disinvestment process, EY is handling the work.”


  • Transaction advisor EY has conducted road shows with European airlines and an Asian airline 

  • Global airlines have not given any enthusiastic response about the sale process

  • Centre may extend deadline for expression of interest (EoI) if it does not get at least two EoIs by May 31

  • Tepid response  due to high fuel price environment and instability with the global airline industry

Among the foreign airlines, while Lufthansa was believed to be keen on Air India, it subsequently expressed an interest 

in bidding for Italian state airline Alitalia, which has been put on the block by the Italian government. “Lufthansa sees greater potential in acquiring an European airline. Its primary interest lies there,” an industry official said.

Air France-KLM is unlikely to bid as it has been embroiled in a severe labour unrest issue, which has seen the resignation of Air France Chief Executive Officer Jean-Marc Janaillac. Air France-KLM was touted as one of the foreign airlines likely to bid for Air India in a tie-up with its commercial partner Jet Airways.

Since then Jet Airways has officially declined any such move, saying the terms of sale remained unfavourable.

Also, British Airways cited the rule on 24 per cent government stake as a reason why it may be reluctant to bid.

In addition, a long stretch of high fuel price environment has reduced the overall risk-taking appetite in the airline industry. Industry experts say that with Vistara’s loss mounting and the airline planning its next stage of expansion through an aircraft order, Singapore Airlines may not show willingness to bid for Air India.

Although there has been a strong buzz on the possibility of the Tatas to bid for Air India, a government official said till now there has not been any official communication from the group.

“Foreign airlines have to find an Indian partner even if they are interested. Reluctance from Indian companies makes it difficult for foreign airlines to participate in the process,” a senior official said.

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