Bizbits

Earlier, Air-India had initiated sell-off talks with Air France after the finance ministry asked it to select a strategic partner as a precondition to release a bail out package of Rs 1,000 crore. The entire sell-off plan and bailout package would now be decided by the new government. The sell-off plan, from initiating talks to conclusion of the deal, is expected to take three to four months.

The airline was keen to tie up with Air France as the latter had a pact with the Transworld 8211; the global alliance recently formed between Air France and Delta Airlines. But as it is a government-owned corporation, it will have to invite tenders to extract the best price.

The new partner will decide about the fleet expansion worth Rs 2,000 crore and the civil aviation ministry asked Air India to delay its fleet expansion till it finalises the partner. If A-I goes ahead with the divestment without fund infusion, it may lead to a loss of bargaining power. The airline has to put the finances on an even keel before approaching the strategic partner, officials said.

Foreign airline to get AI equity

MUMBAI: Air India8217;s strategic partner should be a foreign airline and not any domestic airline. This was essential to bring experience and technology of international standards in the management of AI, Civil Aviation Secretary P V Jayakrishnan said.

The civil aviation secretary, who is also presently the chairman of AI, said this in response to a query whether any domestic airline would be allowed to pick up a stake in the international carrier.

Commenting on selection of aircraft for AI and Indian Airlines, Jayakrishnan said the management teams of both the airlines were currently looking at various types of aircraft, both short-capacity long range SCLR and medium capacity long range MCLR. No final decision has been taken, he added.