The market didn’t seem pleased with IndiGo Airlines’ interest in buying Air India. The InterGlobe Aviation (IndiGo) stock has lost 8 per cent since last Thursday. With the government giving the go-ahead for privatising the debt-laden Air India, some airlines have thrown their hat into the ring.
Domestic market leader IndiGo is the first to have made public its intent. It has expressed interest in acquiring the international operations of Air India and Air India Express, or alternatively in acquiring all operations of Air India and Air India Express. The acquisition could entrench IndiGo’s position in the domestic skies and catapult it to a commanding position in India’s international air traffic.
The market though seems concerned by a few factors. One, the apparent lack of compatibility and synergies between IndiGo, a low-cost carrier, and Air India, a full service carrier. Next, the shape the acquisition could take, given Air India’s huge debt burden. Finally, worries of how IndiGo will fund the acquisition.
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