Jet Air, SpiceJet may join race to acquire segments of Air India
30 Nov 2017
There may be more potential buyers for Air India other than the Tata Group and IndiGo, which have already expressed interest, as Jet Airways and SpiceJet are likely to join the bidding for the debt-ridden airline, according to a Times of India report citing government sources.
"The economics of the game will change completely for whichever airline gets Air India. With its 14 per cent domestic and 17-18 per cent international market share, getting AI will be a paradigm shift for the successful bidder. Other airlines like Jet and possibly even SpiceJet will have no option but to bid for AI," said a TOI source.
However, a SpiceJet official said that the airline is "too small" to bid for AI. A decision will be taken on the bidding once the terms are known, the official added.
A top Jet executive acknowledged to the newspaper that the thinking on acquiring the national carrier is on.
Jet Airways on Wednesday announced a major partnership with Air France, KLM and Delta and could get their backing to take over Air India. Abu Dhabi-based Etihad is also a 24-per cent stakeholder in Jet.
In July, IndiGo had expressed interest in buying the ailing national carrier's international routes and the Air India Express arm.
In a conference call, IndiGo's management had said that they have no desire to take all of Air India's debt and that acquiring all of Air India's subsidiaries is an "impossible task".
Earlier in June, Tata Group chairman N Chandrasekaran had informal talks with the government. Media reports also suggested that the Tatas could get Singapore Airlines on board for a minority stake in AI.
The Tata Group currently operates two airlines in the country, AirAsia India (a joint venture with Malaysia's Air Asia) and Vistara (joint venture with Singapore Airlines).
The Union Cabinet on 28 June had given an in-principle approval for disinvestment of debt-laden state-run carrier Air India.
Stretched by competition from leaner and budget airlines, Air India is reeling under a debt of over Rs52,000 crore, with about Rs28,000 crore in working capital debt and about Rs4,000 crore in interest burden. The carrier has not turned a profit in 10 years.
On 8 August, the parliamentary panel set up to the divestment process heard views of various stakeholders on the disinvestment of national carrier Air India and Pawan Hans Ltd.
The government is yet to announce the final terms for the sale of AI.