New Delhi, Sep 10 : Going whole hog to sell Air India this time after the Modi 1.0 government's failed bid, the group of ministers (GoM) led by Union Home Minister Amit Shah is expected to decide the reserve price of the national carrier and dealing with its large debt.
Among other issues are golden handshake to staff reaching a certain age and extending medical facilities to those who have already retired or would retire in years to come.
Official sources said that the government is nearly decided over a complete exit and making necessary change in eligibility criteria and other terms to align it with the needs of the potential investors.
"Major decisions left are fixing the fair price of Air India and handling the debt.
Then contours of the disinvestment and retaining employees are other issues," said an official.
The meeting schedule of the group of ministers is yet to be decided but is expected shortly.
Apart from Shah, the ministerial panel has Finance Minister Nirmala Sitharaman, Commerce and Railway Minister Piyush Goyal and Civil Aviation Minister Hardeep Singh Puri as the members.
The previous Modi government had dropped the disinvestment plan citing adverse operating environment with global crude prices rising and rupee weakening against the dollar.
The investor sentiment was also tepid. Above all, an impending general election did not make political sense to go for disinvestment of Air India which is generally associated with the country's pride and sometimes termed as "jewel of the nation."
While the country's aviation environment has changed in the last one year with Jet Airways out of the scene now, experts see prevailing conditions better than May, 2018 when not a single bidder showed interest for Air India at EoI (expression of interest) level.
Kapil Kaul, CEO (South Asia) of Sydney-based Centre for Asia Pacific Aviation (CAPA) sees the current operating and investment environment better than last year.
He sees investors showing interest for the national carrier provided some of their issues are sorted out.
"Post-Jet Airways closure, demand-supply dynamics are more stable.
Oil is expected to remain under (Dollar) 60 and rupee around 71-72 which indicates favourable trading conditions compared to last fiscal," Kaul said.
"Globally, funds are available for the right project subject to favourable conditions for investment," he added.
Air India has a total debt of about Rs 60,000 crore.
The cumulative loss of the national carrier is to the tune of Rs 70,000 crore. In the financial year ending March 31, 2019 the airline is estimated to have reported a loss of Rs 7,600 crore.
In an earlier decision, the government had decided to transfer debt of Rs 29,464 crore along with other non-core assets to the newly-created SPV to attract bidder interest for the carrier.
Asked if there would be enough investor interest for Air India this time around, Dhiraj Mathur, Partner, PwC said that it certainly gives a good opportunity to anyone planning to enter Indian aviation.
But he sounded cautious about foreign entities lining up for the carrier.
"With Jet Airways almost out of the picture now, anyone with aspirations of entering the large and growing Indian market, Air India is a very attractive option.
Now, the issue is fair price. Without going into numbers and the books it is difficult to assess the floor price," he said.
Mathur noted that a lot of things have changed from then (when the bid for Air India was invited early last year) and now especially on the global market front.
"For various reasons, including the looming trade war there is a lot more uncertainty now than there was earlier.
But having said that I am positive. Certainly the fundamental value of Air India has not diminished and it remains a good asset. It is a very good opportunity for anyone who wants to enter the Indian market," he added.
(Nirbhay Kumar can be contacted at email@example.com)