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IndiGo rules out joint venture with govt on Air India

Shemin Joy, New Delhi, DH News Service, Jul 6 2017, 19:47 IST
 The airline, however, said it will venture into long-haul low-cost international operations with or without the national carrier. File Photo

The airline, however, said it will venture into long-haul low-cost international operations with or without the national carrier. File Photo

No-frills carrier IndiGo on Thursday ruled out acquiring stakes in Air India in a joint venture with the government while making it clear that it is interested only in the national carrier's international operations.

The airline, however, said it will venture into long-haul low-cost international operations with or without the national carrier.

The airline founders Rahul Bhatia and Rakesh Gangwal said IndiGo is interested in Air India's international operations only but they were not sure whether the government will be ready to sell only a portion of it to them.

The remarks at a conference call with investors and analysts came as there were concerns that IndiGo may bid for the national carrier, which has a debt of over Rs 50,000 crore.

The government had on June 28 gave an in-principle cleared the proposal to disinvest Air India and the next day itself, IndiGo sent an expression of interest to the Ministry of Civil Aviation on bidding for Air India.

"IndiGo is not looking at acquiring all of Air India's subsidiaries. Within Air India, we are interested in Air India's international operations. From day one, our interest is in international operations," Bhatia told investors.

He said the carrier would have to "assess" the feasibility of buying the whole carrier in case the government opts to only sell the business as a whole.

"We aim profitable growth and not aim to become bigger for the sake of becoming bigger. We are not interested in taking assets which we have to monetise at a later date," he said.

Gangwal said a joint venture with the government was not a preferred option for the airline. He said airline would not get into such a proposition even if the government holds minority stakes only.

He also said even if they acquire Air India, they would not go full-service as that model does not work for IndiGo. "If we go, we will enter with a low-cost model...We will venture into long-haul low-cost international operations with or without Air India," he said.

At present, IndiGo flies to seven international destinations -- Bangkok, Doha, Dubai, Kathmandu, Muscat, Singapore and Sharjah -- all short-haul flights and the airline has now shown its intention to operate flights to the United States and Europe.

Acknowledging the strengths of Air India's international operations, Gangwal said the national carrier has taken 70 years to create the huge network and they cannot do it quickly. "It will take us a long, long time to replicate what Air India has done and we do not believe we will be able to replicate Air India in the near future," he said.

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