India is considering selling state-owned Air India in parts to make it attractive to potential buyers, as it reviews options to divest the loss-making flagship carrier, several government officials familiar with the situation said. PM Narendra Modi’s cabinet gave the go-ahead last month for the government to try to sell the airline, after successive governments spent billions of dollars in recent years to keep the airline going. Air India is saddled with a debt burden of US$8.5b and a bloated cost structure. The government has injected US$3.6b since 2012 to bail out the airline. Once the nation’s largest carrier, its market share in the booming domestic market has slumped to 13% as private carriers such as IndiGo and Jet Airways have grown. Previous attempts to offload the airline have been unsuccessful. If Modi can pull this off, it will buttress his credentials as a reformer brave enough to wade into some of the country’s most intractable problems. His office has set a deadline of early next year to get the sale process underway, the officials said. The timeline is ambitious and the process fraught, with opinion divided on the best way forward: should the government retain a stake or exit completely, and should it risk being left with the unprofitable pieces while buyers pick off the better businesses, officials said. Officials who have to make it happen are grappling with the sheer scale of the exercise. Air India has six subsidiaries – three of which are loss-making – with assets worth about US$4.6b. It has an estimated US$1.24b worth of real estate, including two hotels, where ownership is split among various government entities. “The exercise is complex and there is no easy way out,” said Jitendra Bhargava, operational head of Air India in 1997-2010. “At this juncture, selling even part of Air India is far from certain.”<br/>
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The South African government has had to step in to pay a looming loan repayment from South African Airways to prevent the national carrier from defaulting. The move follows a $350m bailout by the government, which had to provide guarantees for the airline in 2016. In a statement, the South African Government National Treasury said it had transferred funds to SAA “to pay back its debt to Standard Chartered Bank, thereby preventing a default.” Failure to have done so “would have triggered a call on the guarantee, leading to an outflow from the National Revenue Fund and possibly resulting in elevated perceptions of risk related to the rest of SAA’s guaranteed debt.” The parliamentary opposition party, the Democratic Alliance, described the government’s action as “a blow to the credibility of both the SAA board and to National Treasury. This emergency funding for SAA indicates the serious crisis that SAA has been mismanaged into.” SAA has been struggling financially for several years. It made a net loss of $111m for the year ended March 31, 2016, the last period for which figures are available. The airline has been hamstrung by an increasingly elderly and fuel-inefficient long-haul fleet based around the Airbus A340. It has also been plagued by unsettled management, with a succession of CEOs and chairmen in recent years, several of whom have been suspended for alleged misdemeanors.<br/>
United Airlines has announced a change to its Mileageplus program that will keep travelers guessing about the number of miles they will need to book a free flight. Starting Nov. 1, United will replace its Standard Awards with a new category called the Everyday Awards, which take more miles to book a flight than the cheaper Saver Awards but will have greater availability for booking. Also, the number of miles needed to book an Everyday Award flight will vary based on demand for the flight and other variables. United has produced a chart that shows a maximum number of miles needed to book a flight but the actual number of miles needed could be lower. Fliers won’t know until they book the flight. Southwest made a similar change in 2015. Delta and American have also added a category of flight awards that vary based on demand and other factors. American posts a chart that shows a range of miles, depending on demand on the day of the flight. Delta does not post the range of miles needed to book a flight, leaving it up to fliers to learn the number when they book a flight. Brian Karimzad, a loyalty reward analyst at Milecards.com, noted that airline tickets sold to fliers who are not on the rewards program vary in cost based on holidays, days of the week, demand and other factors. Airlines have added a range to the price of some rewards program flights to more closely match the fluctuating cost paid by non-reward program members.<br/>