IndiGo interested in Air India, others might follow

New Delhi, June 29 (SURYAA) A day after the Union cabinet gave its in-principle approval for Air India's divestment, Civil Aviation Minister Ashok Gajapathi Raju said that the budget passenger airline IndiGo has expressed interest in participating in the stake sale of the flag-carrier.

"There has been interest shown for Air India. IndiGo has approached the ministry with a formal expression of interest proposal," Raju told IANS.

"Other airlines have also shown interest in Air India, but they have not submitted any formal proposals as yet," he added.

According to Civil Aviation Ministry Secretary R.N.Choubey, a formal proposal from IndiGo was received after Wednesday's cabinet decision on Air India's divestment. 

When contacted, an official from IndiGo said that the airline was "observing a silent period". 

However, the airline informed the BSE that it has evinced interest in Air India's stake sale through a letter. 

"As the Indian government embarks on the journey of privatising Air India and given IndiGo's track record of having created a consistently profitable airline with a strong balance sheet, kindly treat this latter as our expression of interest in acquiring the international airline operations of Air India and Air India Express," Aditya Ghosh, President and Whole Time Director, IndiGo said in a letter sent to the Civil Aviation Minister.

"Alternatively, we are equally interested in acquiring all of the airline operations of Air India and Air India Express," the letter dated June 28 and addressed to Minister Raju read.

The Union cabinet's decision on Air India comes after NITI Aayog in a recent report to the Civil Aviation Ministry recommended strategic disinvestment in the loss-making Air India.

At present, the national passenger carrier has a debt burden of more than Rs 50,000 crore.

The airline in 2015-16 had posted an operating profit of Rs 105 crore. For the last fiscal 2016-17, the company is expected to report an improved operating profit margin.

The flag carrier had got a new lease of life on April 12, 2012, when the previous central government under the UPA had approved a Rs 30,000 crore turnaround (TAP) and financial restructuring plans (FRP) package spanning up to the year 2021.

Currently, Air India's portfolio of subsidiaries include Air India Engineering Services, Air India Transport Services, Alliance Air, Air India Express and the Hotel Corporation of India. It also has a ground handling joint venture AISATS.

Apart from its subsidiaries, the national carrier owns several properties in India and abroad, operational slots at international airport and priceless art work, besides a well trained manpower. 

According to the company's website, Air India operates 118 aircraft of various kind. Its international network consists of 41 destinations across the US, Europe, Australia, Far East and South East Asia and the Gulf. 

The airline's domestic network covers 72 destinations, including far-flung areas of the North-East, Ladakh, Andaman and Nicobar Islands. 

Air India's former Executive Director Jitender Bhargava told BTVi in a interview that he was "glad to see a change in narrative" in which AI's assets base is now being considered.

"There has been a major change in government thinking... now AI assets are also given equal emphasis," Bhargava said.