IndiGo expresses interest in buying Air India

NEW DELHI: Hours after finance minister Arun Jaitley on Wednesday evening announced the cabinet’s approval for privatising Air India, low cost carrier IndiGo submitted its expression of interest (EoI) for the airline.
IndiGo president Aditya Ghosh wrote to aviation authorities Wednesday evening, saying his airline is interested in buying the international operations of AI and AI Express.And if these were not available separately, Ghosh, arguably India’s most successful airline CEO, said IndiGo would be interested in AI as a whole.
Aviation minister Jayant Sinha said the LCC's EOI was the first “unsolicited” formal offer for AI. "A number of domestic and international players have informally approached us to show interest in AI. IndiGo is the first one to do so formally," Sinha said. The minister did not say if Qatar Airways, which wants to start an airline in India, is among the International players that have informally approached the government for AI.
Incidentally, Qatar Airways has long expressed a desire to buy a stake in IndiGo. However, IndiGo has so far “politely declined” Qatar’s offer for buying a stake in it. Whether the two come together to jointly bid for AI remains to be seen.
“Ghosh’s EoI to aviation ministers A G Raju and Jayant Sinha and secretary R N Choubey speaks about India being a strong aviation market where IndiGo is the largest domestic player. His letter is attached to a detailed presentation on IndiGo’s strengths as an Indian carrier,” said a source.
Aviation secretary R N Choubey said AI has huge value and will find many takers. “In the past three years, we have turned around AI operationally. The airline is now cash positive,” Choubey said.
Jayant Sinha said it made "economic and sentimental" sense to retain AI brand name in case of change of ownership. Choubey said the government may ask for retaining of the brand name AI.
IndiGo already has 41% share in domestic air traffic and combined with AI’s 14%, it will cross the half way mark. “Having a dominant position in a market is not the issue, the issue is abusing the dominant position. Any such deal (AI’s acquisition by another player) will have to be examined by the Competition Commission of India,” Choubey said.
An IndiGo spokesman said, “We are observing silent period therefore we have no comments to make.”
TOI had sent queries to other Indian carriers and Qatar Airways, asking if they would send an EoI for AI. While Tata Group, which runs two airlines in India in JV with Singapore Airlines and AirAsia, declined comment, others’ response was awaited till the time of filing this response. All players giving EOI for AI will have to formally bid when the bid is floated.
Aviation minister A G Raju said the ministry will consult his predecessors like Praful Patel and Ghulam Nabi Azad for finding out the best way possible to decide AI’s future.