After multiple failed attempts, the Narendra Modi government is finally seeing some hope of selling the country’s debt-riddled national carrier. But there still could be many a slip between the cup and the lip.

On December 14, the government said it had received multiple interests for strategic investment into Air India. The bidders reportedly include one of India’s biggest conglomerate Tata Sons as well as a joint venture of Air India employees and United States-based investment firm Interups.

The Modi government formally kick-started the divestment process, by deciding to invite expressions of interest for the carrier by January-end, The Mint had reported.

The privatisation of Air India is a top priority for the Modi government, which is battling a revenue shortfall due to the sharp economic contraction triggered by Covid-19. The sale also assumes significance, given that divestment proceeds in the current financial year are expected to drastically fall short of the government’s ambitious Rs 2.1-lakh crore target.

Besides, Air India is flying on a 10-year, Rs 30,231 crore bailout package announced in 2012. “The reason behind the Centre’s desperation is that the funds infused in 2012 are beginning to exhaust now and any further delay would mean an infusion of more funds,” explained Jitender Bhargava, former executive director of Air India and author of The Descent of Air India.

Experts had earlier warned that it is best to hold off on the process in the interest of a successful sale.

“With the rupee depreciating against the dollar, fluctuating oil prices, and an overall economic slowdown, it is better to wait,” Mark Martin, founder and CEO at Martin Consulting, told Quartz in January. “The government should consider the sale of Air India in a more positive economic backdrop.”

In fact, the situation has worsened since then due to the pandemic.

Aviation passenger traffic in India grew at an abysmal pace for most of the year in 2020 due to restrictions on domestic and international travel. In October, the passenger traffic was down by 57% year-on-year.

In January, Martin had also said that potential buyers may prefer to wait out the ongoing economic slowdown before making aviation investments. This, coupled with the Modi government’s earlier failed attempts to sell Air India, mean it might be too early to start celebrating.

Air India’s failed divestment plans

Air India had witnessed a failed divestment attempt in 2018. At the time, investors had baulked at the prospect of the government retaining a 24% stake in the airline. Then, there was also the overhang of Air India’s Rs 60,000 crore debt pile.

But the Modi government made sure it left no stone unturned in its second attempt to sell off the national carrier. The government course-corrected by offering to sell its entire 100% stake, it had informed parliament in December 2019.

To reduce the impact of debt on the buyer, a special purpose vehicle – Air India Asset Holding Ltd, which was set up in February 2018 – is absorbing a bigger chunk of the airline’s debt. So far, the carrier has already transferred Rs 29,474 crore of debt to Air India Asset Holding Ltd, suggest some media reports.

Air India also plans to transfer some of its non-core, and non-operational assets to the special purpose vehicle. So far, only Air India Air Transport, the airline’s ground handling service arm, has been transferred. Air India Asset Holding Ltd also raised Rs 7,000 crore through a bond sale to refinance its debt in August 2019.

These steps seem to have paid off given that the government has managed to stir interest from investors. Now, all eyes will be on January 5, when the government is expected to notify qualified bidders.

“The government’s statement in parliament (aviation minister Hardeep Singh Puri’s comment that Air India will have to shut down if divestment fails) made it clear that it has no plans, it is good in talking but knows little on how to go about the process. The release of expression of interest (EoI) has also been unnecessarily delayed,” Bhargava had told Quartz in January.

Will Air India finally sell?

Even as things are looking up now, experts had earlier said that the government’s measures to make Air India an attractive investment opportunity were not up to the mark.

“The government has not been a great marketer so far,” Bhargava had said. “You need to have a requisite competence in ensuring that you sell a product by putting its strength on the front rather than hiding.”

“The details about the debt and the loss it’s making are in public knowledge but nobody is highlighting the strengths of the national carrier,” Bhargava said. “In the end, it all depends on how sensibly the whole exercise of divestment takes place and what value the airline will add to the potential buyer.”

This article first appeared on Quartz.