Air India sale may struggle to fly despite better terms from govt

The government has sweetened the deal a fair bit for prospective bidders of Air India Ltd. It is now retaining a far greater share of the airline’s debt and has given up the condition of retaining a 24% stake in the airline it had set about two years ago.

For bidders, having full operational freedom without government interference is a huge positive. The reduction in debt and hence, interest costs, will be about 61% under the new terms, as against 35% under the earlier terms set out in March 2018.

From the government’s perspective, it seems like it is really bending backwards to attract bidders and make a deal happen.