The government has done well to remove most of the mindless restrictions put in place the last time it sought to privatise Air India (AI)—these ensured no one bid for the haemorrhaging airline. What it says about the earlier decision-making process is another story. A complete exit from AI instead of retaining 24% like the last time around will reassure potential bidders that there will be no government interference. Allowing sale-and-lease back can make the purchase debt-free, especially since the Centre is absorbing more debt, and being able to carry forward unabsorbed depreciation and losses helps cushion the balance sheet; this, and the relaxed eligibility criteria, means more potential suitors.
Senseless criteria, like the need to run AI “on a going-concern basis” and “on an arms-length basis from (the buyer’s) other business”, have been done away with, though it is not clear why the AI brand is to be maintained. The idea, possibly, is to placate the RSS/swadeshi groups who refuse to understand that the concept of a national carrier is outdated, but an existing-airline buyer not wishing to retain the AI brand will find this a problem.
