The Indian government is considering various options to help reduce the INR600 billion (USD9.3 billion) debt currently on the books of Air India (AI, Delhi International). One option is to hold a reverse auction, leveraging assets such as the airline's landing slots and access to infrastructure, reports The Times of India.
Quoting unnamed sources, the paper states that Air India has operational resources that benefit it competitively and which can be utilised to improve its position on paper. Remaining debt could then be absorbed by the government, making the airline a better proposition for potential investors.
"Through a reverse bid, we can realise better value and also make the whole process more transparent," a source told the newspaper.
A panel of ministers headed by Finance Minister Arun Jaitley will meet to consider their options. Jaitley has previously said that he is willing to completely sell-off the state airline once its debt situation has been stabilised.
"Air India also owns a large number of very valuable properties and that can bring down the debt levels itself," Jaitley told the Economic Times of India last month. "Air India can continue to be a national carrier and somebody else pay for its management."
In a bid to improve the carrier's attractiveness to prospective buyers, management has also set about drawing up a cost-cutting plan aimed at reducing recurring expenditure.
The Times of India quotes government sources as saying that among the proposals being considered is the offering of voluntary redundancy packages to over a third of its 40,000-strong workforce. In tandem to workforce layoffs, the state-owned airline has also dropped plans to lease in eight B787-9s despite the move garnering board approval in April.
