SIA withdraws bid for stake in Air India

SIA withdraws bid for stake in Air India

NEW DELHI (AFP): Singapore Airlines (SIA) has withdrawn its bid for a stake in state-run Air India, one of several national firms earmarked for privatization, a report said Saturday.

SIA was part of a consortium with India's Tata business group which was bidding for a 40 percent slice of the international carrier.

Indian Disinvestment (privatization) Secretary Pradeep Baijal told the Press Trust of India that SIA had bowed out.

"The delay in disinvestment very often leads to withdrawal of foreign investors. This was a very good opportunity and I feel sorry that SIA, a very good airline, has withdrawn," PTI quoted Baijal as saying.

The Tata-SIA consortium was the only bidder left for the Air India stake, after about five others pulled out on their own or were disqualified under criteria set by the Indian government.

PTI said Tata chief Ratan Tata Saturday sent a letter to Disinvestment Minister Arun Shourie saying the group would "review the situation in the light of withdrawal of SIA from the consortium".

An SIA spokeswoman declined to comment on the report. "We will make an announcement when we have something to announce," she told AFP in Singapore.

The latest development is a blow to the government's aim to sell off a 60 percent stake in Air India. New Delhi plans to sell 40 percent of the equity to a strategic investor, including a maximum 26 percent stake to a foreign airline.

Another 20 percent will be sold to Air India employees and financial institutions.

India's aviation laws state that an international airline based here is entitled to routes under aviation treaties only if it is substantially owned or controlled by Indian nationals.

Air India is India's main international airline and entitled to a large number of flights to different countries because of its status as the national flag carrier.

However, lack of funds has kept the airline's fleet from growing and using all the routes.