Singapore Airlines (SIA) says it has not ruled out making a bid for state-owned Air India.
This is after the Indian government announced last week that it intends to divest its stake in the national carrier and offer up to 49 per cent ownership to foreigners who were previously not allowed to invest in Air India.
SIA would be wise to stay away, for several reasons.
First, it already owns 49 per cent of Indian private carrier Vistara, which started operating domestic routes in January 2015.
The airline, which is 51 per cent owned by Indian conglomerate Tata, currently serves 22 Indian destinations with over 700 flights a week, operated by a fleet of 17 Airbus A-320 aircraft. Having already flown more than seven million customers, Vistara plans to launch its first international route some time this year.
SIA should focus all its efforts on the private airline - given that it's been trying for decades to gain a foothold in the Indian air travel market - instead of getting involved in a new venture like Air India.
The second reason SIA should be very wary is that Air India's affairs are in such a bad shape that there's no certainty the airline can be rescued even if there is a transfer of ownership.
Air India has a whopping debt of 520 billion rupees (S$10.8 billion) and while it is possible that the Indian government will absorb a significant chunk to make the airline more attractive to prospective buyers, nothing has been decided.
Even if the debt is drastically reduced, it makes no sense for SIA or any other foreign airline or firm to move in, unless it is given a free hand to do what it must to turn the troubled carrier around.
15/01/18 Karamjit Kaur/Straits Times
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This is after the Indian government announced last week that it intends to divest its stake in the national carrier and offer up to 49 per cent ownership to foreigners who were previously not allowed to invest in Air India.
SIA would be wise to stay away, for several reasons.
First, it already owns 49 per cent of Indian private carrier Vistara, which started operating domestic routes in January 2015.
The airline, which is 51 per cent owned by Indian conglomerate Tata, currently serves 22 Indian destinations with over 700 flights a week, operated by a fleet of 17 Airbus A-320 aircraft. Having already flown more than seven million customers, Vistara plans to launch its first international route some time this year.
SIA should focus all its efforts on the private airline - given that it's been trying for decades to gain a foothold in the Indian air travel market - instead of getting involved in a new venture like Air India.
The second reason SIA should be very wary is that Air India's affairs are in such a bad shape that there's no certainty the airline can be rescued even if there is a transfer of ownership.
Air India has a whopping debt of 520 billion rupees (S$10.8 billion) and while it is possible that the Indian government will absorb a significant chunk to make the airline more attractive to prospective buyers, nothing has been decided.
Even if the debt is drastically reduced, it makes no sense for SIA or any other foreign airline or firm to move in, unless it is given a free hand to do what it must to turn the troubled carrier around.
15/01/18 Karamjit Kaur/Straits Times
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