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IndiGo eyeing Air India's privatization

Jul 07, 2017 06:58 AM GMT+0530 | 0 Comment(s)

AFP - India's largest airline IndiGo confirmed its interest in snapping up the international operations of troubled state-run Air India on Thursday, following the government's bid to privatise the debt-laden flag carrier.

Unveiling a broader plan to expand into long-haul flights, IndiGo told investors that it would be keen to take on some parts of Air India, if it was able to strip out the ailing carrier's international and budget arms from other parts of the business.

"We are interested in the airline operations of Air India. And more specifically, we are focused more narrowly on Air India's international operations and Air India Express," Co-Founder Rahul Bhatia told investors.

Last month, New Delhi said it was hoping to sell a stake in Air India, which has long struggled to compete with privately owned rivals and has amassed some $8 billion (7 billion euros) in debt.

India has the world's fastest-growing passenger airline industry, expanding at an annual rate of around 20 percent, and the sector holds vast untapped potential. But its loss-making state airline is plagued by a reputation for delays, cancellations and poor service.

Efforts to privatise the airline - a huge drain on state coffers - have foundered in the past and experts said the government would have no choice but to write off its massive debt if it was to attract a buyer.

In its call with investors, IndiGo said it did "not have the ability or the desire to take on debts or liabilities that could not be supported by a standalone restructured international operation of Air India".

IndiGo already flies to seven international destinations, and Bhatia said an acquisition of Air India's operations would give the firm "a path to become a major player in the international market".

Experts say Air India's large fleet and significant market share could make it an attractive proposition, if the debt was written off.

Tata Group, an Indian conglomerate that owned Air India before the carrier was nationalised nearly 70 years ago, has also been touted as a possible purchaser.


 

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