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Emirates Airlines likely to pull out from bidding for Air India

Ashwini Phadnis

NEW DELHI, Feb. 21

THE Government's plans for disinvestment in the national carrier, Air India, seems to have hit a bumpy terrain with one more suitor, the Dubai-based Emirates Airlines also set to pull out of the bidding process, according to airline sources.

This is the second blow in 48 hours for the Government's disinvestment efforts as the L.N. Mittal-led consortium, which had a technical tie-up with British Airways and Qantas, is also understood to have backed out of the bidding process on Tuesday. Emira tes officials in Dubai did not offer any comment on the airline backing out.

With just two days left for the deadline for submission of details of the consortia and the initial technical bid, the suitors' list will now probably be restricted to just the Tata-SIA combine, the Hindujas and the Delta-Air France combine.

Meanwhile, senior Tata officials have confirmed that they will be putting in a bid for the Maharaja before the deadline expires.

The reported decision of Emirates to pull out has come as a surprise. In an exclusive interview to Business Line in September last year, the Emirates group Managing Director, Mr Maurice Flanagan, had said that while the airlines was interested in Air Ind ia, there were a number of imponderables. ``Firstly, we will need to be assured on the issue of traffic rights, which AI is operating to or not and whether they will still be available, or whether the Indian Government will allow other Indian carriers to fly abroad also,'' Mr Flanagan had said.

According to him, it was imperative for any airline participating in the disinvestment process to get a clear indication of the extent to which they would be allowed to participate in the management of Air India. Giving the example of Sri Lankan airline, in which Emirates has a stake, Mr Flanagan said the airline had been given a 10-year management contract.

Further, in November last year, hours before the deadline for submission of expression of interest (EoI) for AI closed, Mr Flanagan, had confirmed to that the airline would be putting in a bid.

Senior officials of the Department of Disinvestment, while admitting that there has been a slight delay in the disinvestment process in the AI and Indian Airlines moving forward, feel that it is unlikely to affect the final outcome.