Logistics

InterGlobe confirms interest in Virgin Australia sale

Our Bureau New Delhi | Updated on May 15, 2020 Published on May 15, 2020

IndiGo not part of bidding process, say sources

InterGlobe Enterprises (IGE), which runs low-cost airline IndiGo, confirmed on Friday that it has signed an agreement to participate in the sale process of the bankrupt Virgin Australia (VA). IGE is an Indian conglomerate which has interests in aviation and hospitality, among other segments.

In a statement confirming its participation, IGE said it is bound by the confidentiality requirements of the agreement and is unable to divulge anything further at this stage.

VA went into liquidation with a debt of over $5 billion last month. Sources indicated that InterGlobe Aviation, which manages IndiGo, is not part of the expression of interest (EoI) by IGE. Rahul Bhatia, the owner of IGE, is one of the co-promoters of IndiGo.

Friday is the last date for putting in an EoI for VA and the short-list of bidders is expected to be finalised by June.

Bhatia’s readiness to pump funds into another airline is seen to reflect his bullishness on the prospects of the aviation industry. A section of employees in IndiGo sees the move as meaning their jobs are relatively safe.

Little synergy

The decision not to involve IndiGo in the bidding process for VA makes good sense, said industry experts.

For starters, VA is not a no-frills airline, making its customer profile different from that of IndiGo, which is an out and out low-cost airline.

“Virgin Australia moved from a low-cost airline to a full-service airline while IndiGo has continuously maintained that it is comfortable being a low-cost airline; hence there is a definite mismatch there,” said an industry watcher who declined to be identified. “Being a full-service airline, the profile of customers (in terms of business, value-added service needs, loyalty programmes etc.) will be different and hence not much synergy can be extracted.”

Further, IndiGo and VA have vastly different fleet mixes. The VA website shows it has a fleet of about 116 aircraft, a majority of which are Boeing — it has 75 Boeing 737-800 and Boeing 737-700 aircraft. In comparison, IndiGo’s fleet comprises Airbus A-320s and the smaller ATR variety of aircraft.

With little synergies, it would not have made sense for IndiGo to be part of the bid process for VA, said the industry watcher.

Published on May 15, 2020

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Sincerely,

Support Quality Journalism
  1. Comments will be moderated by The Hindu Business Line editorial team.
  2. Comments that are abusive, personal, incendiary or irrelevant cannot be published.
  3. Please write complete sentences. Do not type comments in all capital letters, or in all lower case letters, or using abbreviated text. (example: u cannot substitute for you, d is not 'the', n is not 'and').
  4. We may remove hyperlinks within comments.
  5. Please use a genuine email ID and provide your name, to avoid rejection.
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.