Thursday, November 30, 2017

Race for Air India heats up as Jet Airways, Spicejet board the flight to take over Maharaja’s throne

Major Indian aviation companies Jet Airways and Spicejet too have thrown their hat in the ring to acquire Air India, joining the race alongside IndiGo and Tata Group, even as the troubled national carrier’s disinvestment has reportedly moved to the backburner with no visibility on completion of its stake sale by early 2018, as was being contemplated earlier.
Jet Airways and Spicejet may also join the race to take over Maharaja from the government keen to offload the money guzzling and fast declining air carrier, The Times of India reported citing unidentified sources. So far, Tata Group, IndiGo and Bird Group have expressed interest in buying Air India. Air India’s 14 percent domestic and 17-18 percent market share in the international traffic makes it an attractive acquisition target, but its heavy debt burden acts as a potential deterrent. In addition, considering Air India’s extensive traffic and its international slots, major players with ambitions to expand overseas would be keen to bid for it.
Air India, under intense competition from leaner, more efficient and often-cheaper private airlines, is reeling under a debt of over Rs 52,000 crore, with about Rs 28,000 crore in working capital debt, and about Rs 4,000 crore in interest burden alone. It has not turned profitable in 10 years, since at least the year 2007.
30/11/17 Financial Express