Saturday, July 01, 2017

IndiGo says it is interested in buying Air India’s overseas business if a demerger is possible

Private airline IndiGo has expressed interest in buying Air India’s international business, which the government put up for disinvestment on Thursday, reported Business Standard on Friday. Civil Aviation Secretary Rajiv Nayan Choubey confirmed the news. IndiGo has a 40% market share and projected profitability for nine consecutive years.

In a letter to Civil Aviation Minister Ashok Gajapathi Raju, IndiGo President Aditya Ghosh said that the airline’s profitability and strong domestic network made it an “ideal candidate” to acquire the business. “As the Indian government embarks on the journey of privatising Air India and given IndiGo’s track record of having created a consistently profitable airline with a strong balance sheet, we express interest to acquire the international operation of the airline,” Ghosh wrote.

However, Minister of State for Civil Aviation Jayant Sinha said that the Group of Ministers headed by Finance Minister Arun Jaitley would take a call on whether there a demerger of Air India’s international business is possible. The GoM has been formed by the Cabinet to take decisions about the government’s disinvestment from Air India as well tackling its debt and transferring its assets to a shell company.

IndiGo has told the government that it is open to buying the entire operation of the national airline if the demerger of its international business is not possible. IndiGo’s offer to buy Air India’s international business stems from its intention to expand its global network.

Air India, which has a fleet of 140 planes, flies to 41 international destinations. The airline is saddled with a debt of around Rs 46,500 crore. However, Indigo officials ruled out taking on any debt or liability in case they buy Air India out.
30/06/17 Scroll.in

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