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One of the largest countries in the world was unsuccessful in its attempt to find a buyer to turn around its struggling state-owned airline.

The Indian government has stopped the sale of Air India, the country’s flag carrier. Why? Because they received zero bids for the debt-riddled airline.

In March, the Indian government put Air India up for sale — offering a 76% stake in the carrier that has $7.8 billion of debt. It didn’t have a minimum price, but the government was accepting bids from any serious investor. Still, it didn’t receive any offers by the time the bidding period had closed.

The Indian government will continue to support Air India financially, and it surprisingly has plans to place orders for more aircraft. It’s even been reported that the airline will unveil a brand new international first and business class product at the end of this week. TPG reviewers’ experiences on the airline have been downright horrible to pretty solid.

Air India’s business class on its 787 Dreamliner. Image by Zach Honig / The Points Guy.

Indian Finance minister Arun Jaitley said that the government will work to make the airline more profitable before they put it up for sale again, even saying that it could list itself on the stock exchange.

“Certain conditions have to be met before listing a company. Once Air India fulfills those, we will go in for an initial public offering and subsequent listing,”Jaitley said.

Air India would have to post a profit for three years straight before it can list itself on the stock exchange. The airline hasn’t had a single profitable year since 2006.

Potential buyers were reportedly worried by the the $5.1 billion in debt they would have to take on, as well as the fact that the government was going to retain ownership of 24% of Air India. The terms of the deal also forbid anyone from merging the airline with its own business as long as the government held a stake in the carrier.

“The airline is posting operational profits,”Jaitley said. “None of the flights goes empty. With all the cost-efficient mechanism in place, we will continue improving its operational efficiency. There is no need to rush in for disinvestment as of now.” 

A report from the Mumbai Mirror shows how messy Air India’s financials are. The airline is covering about half of its employee’s salaries ($15 million) through the rental of its old headquarters in Mumbai. The iconic building was constructed in 1976 and was one of the city’s first skyscrapers.

H/T: Airways Magazine

Featured image by Bruno Geiger / Flickr.

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