Israel's El Al Sues Over Air India Flights In Saudi Skies

Govt plans to sell 76% stake in Air India, cede management control

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The government plans to sell 76% stake in Air India Ltd, according to the preliminary information memorandum released Wednesday on strategic disinvestment of the national carrier.

The trade union has also said that despite opposition from unions, the government privatised the airports and "forcibly" merged the Indian Airlines and Air India which perpetuated the problems for the national carrier.

El Al has taken legal action against the Air India, Israeli government, its Civil Aviation Administration, Transportation Minister Israel Katz, said the Israeli airline's spokesperson Ran Rahav.

As per the advertisement issued by the Government, the companies or consortium will be eligible to bid only if their net worth crosses Rs 5,000 crore.

From the mid-'80s right up to the dawn of the new millennia, governments across most of the developed world exited the airline business.

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According to the bid document, the selected bidder would need to retain its stake in Air India and management control of the airline for at least three years. There could be a compelling case for an NTPC, ONGC, IOC, SBI, LIC or BHEL to remain state-owned, as they have not only held their own against private competition, but continued to be profitable and dividend-paying entities.

As long as El Al is barred from flying over Saudi Arabia en route to and from Israel, it was illegal for foreign airlines to do so, Rahav said, citing the International Air Transport Association's principles of reciprocity and equality.

Companies including low-priced Indian carrier IndiGo, owned by InterGlobe Aviation, Tata Group and Turkey's Celebi Aviation Holdings, have expressed an interest in buying some of Air India's operations.

"I'm sorry to read in the media about the government inviting expression of interest for selling Air India, the jewel of our nation".

Indigo operates primarily on domestic routes has about a 40 percent market share compared with a domestic market share by Air India and subsidiary Air India Express of 12.3 percent. What happens on 28th May, when qualified interested bidders are invited to the second stage of bidding is anyone's guess.

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