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Air France-Delta on shortlist for Air-India

Air France, in league with Delta Airlines, is among the short-listed bidders for state-owned Air-India, the Press Trust of India said.

Others include India's Tata group in tandem with Singapore Airlines, as well as the Hindujas, the British-based expatriate Indian family, the agency said.

The Indian government announced last week it had completed a shortlist of bidders for money-losing Air-India but would not reveal the names.

The government closed bids for the sale of the two airlines last month, netting at least six bids for Air-India and at least three for Indian Airlines.

The Tatas and Hindujas have also been shortlisted to bid for domestic carrier Indian Airlines along with consumer durables company Videocon International, the agency said.

The government is seeking to privatise both airlines as part of an economic liberalisation drive and hopes to complete the sales by the end of March.

Despite its financial woes, Air-India has drawn interest because of its regional strategic hub, a foothold in the growing Indian travel market, a recognised brandname and bilateral flying rights, analysts say.

Submit plans

The government has asked shortlisted bidders to submit an preliminary technical proposal containing details about their business plans and sign confidentiality agreements.

The agency quoted sources as saying the Hindujas were talking to two foreign airlines about participating in their bid for Air-India.

Hong Kong-based Cathay Pacific would be Videocon's technical partner in its bid for Indian Airlines, PTI said.

The government has not put a price tag on Air-India or Indian Airlines and analysts say not enough is known about the airlines to come up with a valuation.

The government is selling up to 40 percent of Air-India and 26 percent can be bought by a foreign airline.

In the case of Indian Airlines, it plans to sell a 26 percent stake, but bidding is limited to local firms, non-resident Indians and foreign firms majority-owned by expatriate Indians.

Meanwhile, the Indian pilots union, which was disqualified for bidding for Air-India on the basis of net worth, has asked the government to consider the employee saving funds of Air-India employees as an indicator of net worth, PTI said.

The union was in talks with a strategic partner for a tie-up to provide the necessary funds to acquire the 40 per cent stake in Air-India, the agency said, quoting a statement by the pilots.

The union said disqualification of the proposed buyout would send out wrong signals to all future employee-led bids for public sector companies coming up for sale.

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