United Airlines not looking to participate in Air India disinvestment: CEO

Ashwini Phadnis October 31 | Updated on October 31, 2019

Oscar Munoz, Chief Executive Officer, United Airlines. File Photo   -  Bloomberg

United Airlines is unlikely to participate in the upcoming divestment of Air India. “Buy a piece of Air India? I am not sure that is something we are looking to do,” Oscar Munoz, Chief Executive Officer, United Airlines, told BusinessLine when asked whether the American airline would be interested in bidding for the Maharaja.

Munoz was addressing the media on the sidelines of FlightPlan 2020, organised by United Airlines, in Chicago. United Airlines is one of the founder members of the Star Alliance, a global alliance of over 27 airlines, which Air India joined in 2014.

In July this year, United reported second-quarter net income of $1.1 billion, diluted earnings per share (EPS) of $4.02, pre-tax earnings of $1.4 billion and pre-tax margin of 11.9 per cent, expanding its pre-tax margin by 4 points versus the second quarter of 2018.

Munoz declined to get into specific reasons why United might not be interested in participating in the divestment of Air India. “Our partnership in India is expanding. Whether we take financial investments or create partnerships through code-share agreements….. there are many ways to make investments and create a bonding and partnership,” he added.

In July, United announced that it had entered into a new alliance agreement with Vistara. The agreement, effective Fall 2019, will expand United’s global route network to more than 20 destinations throughout India.

If United decides not to participate in the Air India divestment process, it will be the second global airline after Air France-KLM to declare that it is not looking at this investment opportunity.

Welmer HT Blom, Senior Vice President, Commercial, Sales and Marketing, Air France-KLM, had told BusinessLine earlier this month that the European carrier combine “is not studying the Air India divestment” programme.

Meanwhile, United’s current fleet of aircraft do not have the range to fly to more destinations in India than are being currently served, Scott Kirby, President, United Airlines, said. “We will be adding San Francisco-Delhi later this year. The current aircraft in the fleet do not have the range to reach Bengaluru or other cities,” he said in response to a question.

United seems to be takign Air France-KLM’s of investing in India by adding a flight linking Amsterdam to Bengaluru later this month. Air France-KLM also started a Bengaluru-Amsterdam flight from October 31.

United has been flying to India since 2005, offering passengers year-round daily non-stop flights between New York/Newark and Mumbai and Delhi.

(This Correspondent was in Chicago at the invitation of United Airlines)

Published on October 31, 2019

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