Air India decision due
For sale: not many planes but lots of rights to fly
The decision on who is to control Air India when it is privatised is due to come a step closer on Friday.
The cabinet committee on security meets on Friday to decide whether to the two remaining bidders meet their minimum requirements.
The most controversial of the bids is from the Hinduja brothers, put forward jointly by their Madras-based bus-maker Ashok Leyland and a subsidiary of Germany's Lufthansa.
Analysts expect the competing bid by Singapore Airlines and the leading Indian industrial group Tata to win the day.
No price tag has been put on Air India by the government or JM Morgan Stanley, the bank advising the sale, because of its allegedly vague asset register.
At 700 employees per aircraft, job losses seem inevitable following the sell-off
Some reports value it at $2.6bn (£1.85bn).
However, on Thursday the government said at least two-thirds of the board of directors, the chairman and the managing director of Air India should be Indian nationals.
And it said it would retain the right to nominate three board directors, with a further four being appointed in consultation with the buyer of the 40% stake.
Such insistence on retaining control could have a negative impact on the airline's market value.
Even so, last week India's government said it would go ahead with the Air India sell-off as long as the reserve price was met, even if there is only one bidder left in the race.
The airline's true worth does not lie in its 25 aircraft, or even in its 18,000-strong workforce, which at more than 700 workers per plane is double the industry standard. Job losses are expected after the sell-off.
Investors will not be impressed by the company's bottom line either, given that Air India has lost money for seven years and has amassed 38bn rupees in debt.
But underlying the balance sheet are a number of valuable assets.
The airline has bilateral rights to fly to 96 destinations, but only uses 19 because of its small fleet.
These rights, which include London, New York, Paris and Chicago, can be leased to other carriers.
The new stakeholder would also gain a strategic hub, access to a huge and growing Indian travel market, a popular brand name and large, undisclosed land holdings.
In addition, the Indian government has committed to further investment saying it wants to double the number of operating aircraft in the next five to seven years.
Foreign airlines can bid for a maximum of 26% of Air India, while the remaining 14% must be held by an Indian partner.
Employees and financial institutions will be offered 10% each, with the rest being retained by the government.
If the Tata group gained control of Air India, the carrier would revert to its original owner. Tata pioneered aviation in India in the 1930s, but the airline was nationalised and renamed Air India in 1953.