Global airline majors lukewarm to acquiring stake in Air India

Ashwini Phadnis New Delhi | Updated on January 28, 2020

The government’s move to divest stake in Air India seems to have evoked a lukewarm response from the global airline majors.

While the Dubai-based Emirates said that it does not intend to acquire equity in Air India, Singapore Airlines said that it does not comment on any “specific investment opportunities including India.”

A spokesperson for Air France KLM refused to comment on the airline’s position and on Monday evening. Ronojoy Dutta, Chief Executive Officer, IndiGo said “No comments” when asked whether IndiGo will participate in Air India’s divestment.

These responses come less than 24 hours after the government released the Preliminary Information Memorandum inviting entities to acquire a 100 per cent stake in Air India and Air India Express and a 50 per cent stake in Air India SATS Airport Services Private Limited.

“We do not intend to acquire equity in Air India as we are currently focused on our own organic growth. We remain committed to support India’s vision for the tourism and aviation sectors,” Emirates said adding its journey in India has been defined by progressive investment, partnership, and growth. “We started with two direct routes to Mumbai and Delhi, and now offer 170 weekly services to nine cities. Through our partnerships with SpiceJet and Vistara, our customers have access to an extensive network of cities across India,” the statement issued by the airline adds.

In October last year, Oscar Munoz, Chief Executive Officer, United Airlines, had told BusinessLine that the airline is unlikely to participate in Air India’s divestment. “Buy a piece of Air India? I am not sure that is something we are looking to do,” he had said.

Similarly, Welmer HT Blom, Senior Vice-President, Commercial, Sales and Marketing, Middle East, Gulf and India, Air France KLM, had said the airline “is not studying the Air India (divestment)”.

He added that for Air India you need deep pockets and you need to change a lot. “Given the current conditions, we are not on the table. I will not exclude anything for the future. But it is not logical for the Air France-KLM strategy now to move forward to sit on the table for a discussion on investing in Air India,” he had said.

Meanwhile, Kapil Kaul, Chief Executive Officer and Director, Centre for Asia Pacific Aviation (CAPA), believes that the government has structured a “very attractive offer” and it has demonstrated a serious commitment to exit Air India. “Expect a significant response,” he added.

Published on January 28, 2020

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