Monday, January 27, 2020

Here's what IndiGo CEO Ronojoy Dutta told an analyst when asked about interest in Air India

Would IndiGo be interested in Air India? asked an analyst at IndiGo's post-results conference call on January 27.

"No comments," replied IndiGo CEO Ronojoy Dutta.

To industry observers, the comment is more like a glass half-full, than half-empty.
And that's because of three reasons. One, the government has decided to completely exit from Air India, and will sell 100 percent of its share. That means a new investor will have complete control over the operations.

At the same time - the second reason - the government wants an Indian investor to call the shots at Air India, after the divestment. That again will be an advantage for IndiGo.

Third, India's largest airline was open about its interest in Air India when the government last called for expression of interest, in 2018.

Though IndiGo eventually decided to stay away from Air India, it will surely check on what the government's view is on one critical factor: Will the government be open to separating some of Air India's operations, and sell them individually?

In 2018, IndiGo went public on its interest in acquiring only the international operations of Air India, and that included the latter's low-cost arm Air India Express. Two years on, the Gurugram-based airline hasn't yet commented on Air India divestment, but it will loath to pass on an opportunity to acquire some of the assets.

More so now, because IndiGo is rapidly expanding internationally. It started flying to seven new international destinations in the third quarter of the present financial year. In all, IndiGo now flies to 23 international cities.

How will Air India and Air India Express add to it?

The combine will command an overall share of 18.6 percent of the international market, flying to 45 overseas destinations. Also, Air India has 2,738 international slots,  and has code share agreement with 25 airlines.
27/01/20 Prince Mathews Thomas/
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