PE players shun airlines, for now

Mumbai: Global equity companies have no plans to put their money in the Indian aviation industry even though the carriers are seeking $2.5 billion in cash for expansion.
“We certainly would be looking to invest in airlines in India but we would like to wait and watch. The first round of consolidation for the industry is over and now we have three dominant players, which is great. We will wait to see how the benefits of merger, route rationalization and international operations shape up the airlines in India and when they would start showing stronger operational numbers, which is not happening right now,” said TPG Managing Director Puneet Bhatia.
The Group has made investments into Asia-Pacific aviation of late, but Bhatia refused to give the details. He said the group would be looking to invest into large established players.
However, it will be difficult for low-cost carriers to get the funding as only few airlines might end up getting all the investments, according to the head of a leading Mumbai-based equity research firm.
Big investment groups such as Goldman Sachs and Blackstone have stayed away from investing in the sector.
Private equity firm Kotak Investors Advisors, which invested in Paramount Airways a considerable amount (Kotak did not give investment details) to get a board seat said it is not in a mood to invest any further in the sector.
12/03/08 Manisha Singhal/Business Standard

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Categories: Foreign Mar 2008, Indian Aviation- In General Mar 2008