IndiGo expresses interest in buying stake in Air India

NEW DELHI: IndiGo, India’s largest carrier in terms of market share, has expressed interest in Air India, secretary civil aviation R N Choubey told reporters today.

“Post the cabinet decision tomorrow, we have received an expression of interest for Air India from IndiGo. They have said that they are interested in Air India,” secretary R N Choubey told reporters today.

The Cabinet yesterday approved divestment of Air India.

Air India has a fleet of 118 aircraft and flies the highest number of passengers to and from India according to Directorate General of Civil Aviation data. It also has coveted parking slots in airports round the world such as New York, Chicago and London besides 18 morning departure slots in Mumbai alone.

Air India’s three profit-making subsidiaries are Air India Express (low-fare international carrier), AI Transport Services (ground handling unit) and AI-SATS (a 50:50 ground-handling JV with Singapore Airport Terminal Services).

On the flip side, the mounting debt is the reason the government wants to exit Air India. The Modi government has infused nearly Rs 16,000 crore since coming to office in 2014 and the central exchequer is no longer keen on keeping the airline afloat with little sign of a revival.
Niti Aayog has recommended divestment of up to 100%, suggesting three possible stake-sale options — 24%, 49% and 74%. This is based on studies of revival plans at carriers in which governments exited fully, including British Airways, Japan Airlines and Austrian Airlines. The proposal entails the government taking a hit by waiving Rs 22,000 crore in debt.