The government on Tuesday extended the deadline for the submission of bids for the sale of its stake in Air India from May 14 to May 31, according to a notification by the Ministry of Civil Aviation. The shortlisted bidders will be intimated on June 15.

On March 28, the government invited bids to divest 76% of its stake in the national carrier through transfer of management, control and sale of equity share capital.

However, no company has expressed interest or reaffirmed it so far. In fact, rival airlines Jet Airways and IndiGo have pulled out of the race.

Analysts said Jet Airways made the decision because the buyer has to take on Rs 33,390 crore of Air India’s total debt of Rs 48,700 crore. This dissuaded the airline as it is trying to pare its own losses.

IndiGo withdrew saying the terms set by the government were not suitable for the private company. “We do not believe that we have the capability to take on the task of acquiring and successfully turning around all of Air India’s operations,” said Aditya Ghosh, the airline’s president.

Minister of State for Civil Aviation Jayant Sinha had earlier said Air India would be put up for sale as four different entities. The national carrier, its low-cost arm Air India Express and subsidiary AISATS will be one entity while Alliance Air – its regional arm – will be another. Air India Air Transport Services Ltd and Air India Engineering Services Ltd will be sold separately. Bidders can attempt to buy the four entities separately, or in any combination.

Debt history

Air India has not been earning a profit since it was merged with the state-owned domestic operator Indian Airlines in 2007. The company made an operating profit of Rs 298 crore in the last financial year through March 2017 but still posted a net loss of Rs 5,765.16 crore.

In January, the government decided to divest its stake in Air India, ignoring a parliamentary panel’s recommendation to give the debt-ridden airline five years to revive itself.