Air India’s $8 billion debt has lead Indian Prime Minister Narendra Modi to sign off on a plan to sell all or part of this company including their 5 subsidiary companies, a joint venture, and a combined workforce of 27,000. With also acquired space near London Heathrow, land in Tokyo, Hong Kong, as well as Nairobi, Air India struggles to lose money in their airline operation over the years.
Buyers might be interested in Air India’s overseas routes and landing rights at most global airports as well as their ground handling services and in house engineering. However, finding someone to purchase Air India in full with all their assets, subsidiaries, artifacts, as well as the accumulated debt is going to be very difficult. The Prime Minister’s government must decide on how the sale will even take place and how much the airline is for sale.
On June 28, India’s biggest commercial airline, IndiGo said that they were willing to buy out the airline’s operations or even the entire business. As a result, their stock dropped 8 percent in 2 days clearing out half a billion dollars from the company’s market value. Following this, owners of IndiGo said that the budget carrier would soon want to start low cost and long haul flights which would give them immediate overseas routes.
Beginning in 2007, Air India has been unprofitable since their merger with Indian Airlines Ltd. The company’s net loss totaled to 38.4 billion rupees.