Govt. may not split Air India for stake sale :

Govt. may not split Air India for stake sale :

Govt. may not split Air India

Context:

• The central government may not sell Air India’s domestic and international operations separately.

Introduction :

• The government’s concern is that Air India’s valuation may take a hit if hives off Air India into two companies and invites bids for its domestic and international operations.
• This might come as a hurdle to low-cost airline IndiGo’s plan to acquire its international operations.
• “Air India’s business cannot be split merely based on an expression of interest from a single private player. If we sell lucrative assets separately, it will make the divestment of the domestic unit and subsidiaries tricky,” said Aviation Ministry official.
• The government’s plan to disinvest from its debt-laden flag carrier got a boost with Indigo, the country’s biggest airline by market share; expressing interest in buying astake in Air India a day after the cabinet approved a proposal to dilute state ownership in the company.