IndiGo No Longer Interested In Acquiring Air India!

India’s leading low-cost airline IndiGo, which is operated by InterGlobe Aviation Ltd, announced that they will not bid to acquire Air India’s entire airline business.

It is said that IndiGo was the first airline to show interest in buying Air India even before the government formally invited “Enquiries of Interest”.

The government has offered to sell 76% stake in Air India along with its subsidiary Air India Express and a 50% stake in AISATS, a ground-handling joint venture with Singapore Airport Terminal Services (SATS).

According to the president and full-time director of IndiGo, Mr Aditya Ghosh, IndiGo has expressed its interest from the first day in the acquiring Air India’s international operations and Air India Express. However, that option is not available under the government’s current plan to sell Air India. He also stated that Indigo doesn’t have the required capacity or the capability to acquire the airline and revive its operations.

This will not affect IndiGo’s plan to start international flights. Promoters of the airline had made it clear that they will start flying internationally “with or without” Air India.

IndiGo has the largest domestic market share with a 39.9% share. In fact, IndiGo is the only Indian carrier which is qualified to bid based on the eligibility criteria. According to the criteria, an airline is eligible to bid  if it has a minimum net worth of ₹5,000 crore and has generated profits after tax in at least three of the immediately preceding five financial years.

IndiGo is now officially the second airline to pull out of the bid for Air India.SpiceJet’s promoter Ajay Singh said that the airline is too small to bid for Air India and pulled itself out in January. This leaves Jet Airways and Air Vistara to bid for Air India.

Experts say that if Air India, in its present situation is bought by an airline, it will need a huge capital investment, of $6-8 billion to start the bid and more to turn the airline around.