Saturday, April 07, 2018

IndiGo's exit from Air India sale: 'Expected', say some. 'Good for AI,' say others

Is IndiGo's exit a reflection of the industry sentiment towards the Air India divestment? Yes, says a senior executive from an international airline.

"The pullout was not surprising, it's sensible," he told Moneycontrol. The airline he works for, despite being one of the biggest names in global aviation, didn't consider participating in the divestment of India's national flyer.

At the same time, others have called it a "wheat separated from the chaff moment" in the Air India divestment process.

"Many have been scavenging for bits and pieces. But the government has been clear that it wants to sell Air India to someone who will make something out of the national airline as a whole," says Mark Martin, Founder & CEO of Martin Consulting LLC, an aviation advisory and consulting firm.

IndiGo, in an announcement on Thursday night, said  it has opted out of the race for Air India.
 “From day one, IndiGo has expressed its interest primarily in the acquisition of Air India’s international operations and Air India Express,"  said Aditya Ghosh, President and Whole Time Director.
"However, that option is not available under the government’s current divestiture plans for Air India. Also, as we have communicated before, we do not believe that we have the capability to take on the task of acquiring and successfully turning around all of Air India’s airline operations,” he added.

The country's largest airline by domestic share was hoping that the government demerges the domestic operations of Air India, enabling IndiGo to bid for just the international business of the national airline.

But the Government has decided to sell Air India, Air India Express and the ground handling unit, AISATS, together.
06/04/18 Prince Mathews Thomas/moneycontrol

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