IndiGo’s shows interest to buy Air India Boosts Government Sale Plan
IndiGo, India’s biggest airline has expressed interest to buy a stake in national carrier Air India Ltd., giving a boost to the government’s plan to sell the unprofitable company saddled with almost $8 billion of debt.
The budget carrier operated by InterGlobe Aviation Ltd. has written to the government that it’s keen to acquire the airline operations of Air India and its budget airline unit Air India Express Ltd., the company mentioned in a filing Thursday. The expression of interest came a day after Prime Minister Narendra Modi’s administration gave a preliminary approval for the sale and ordered a ministerial panel to explore options.
“It’s time for India to take back its fair share of international traffic, and bring back this economic wealth to where it rightfully belongs,” IndiGo President Aditya Ghosh said in the letter, citing that his company’s track record of creating a profitable airline with strong balance sheet.
Union Finance Minister Arun Jaitley told reporters in New Delhi on Wednesday that a group led by him will decide on the amount of stake to be sold and Air India’s debt. A government panel had earlier recommended privatising the airline by possibly asking the buyer to absorb more than $3 billion of loans linked to aircraft purchases, a person with direct knowledge of the matter told Bloomberg earlier this month.
Air India, which is known for its Maharajah brand icon, traces its roots to Tata Airlines, founded in the 1930s by the then-patriarch of Tata Group, JRD Tata. A member of the global Star Alliance, it now has a fleet of about 154 planes, according to government data. A stake in Air India may help IndiGo enhance its overseas network.
Niti Aayog, the government’s top policy planning body, has suggested options for the future of Air India earlier this year, including hiving off real estate assets before privatizing the carrier and writing off half of the debts accumulated by the airlines.
News Source: www.ndtv.com
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