IndiGo shows interest in Air India's divestment

No-frills carrier IndiGo on Thursday sent an “unsolicited” missive expressing its keenness to buy stakes in Air India within hours of the government announcing its “in principle” nod for disinvesting the national carrier.

The airlines' formal correspondence reached the Ministry of Civil Aviation though the government is yet to finalise contours of the disinvestment, including how much stake should be divested.

Sources said IndiGo informed MoCA that it is interested in buying the international operations of Air India and Air India Express and if this option is not available, then they would be in for buying it as a whole.

Minister of State Jayant Sinha and Civil Aviation Secretary R N Choubey said they have received the letter from IndiGo, currently the industry leader with around 40% share of the market.

"IndiGo says it is interested in Air India and have sent expression of interest," Sinha said. Choubey said the IndiGo correspondence says they have heard this news and would be interested in buying stakes in the national carrier.

However, Choubey added, "they can apply only when the formal bid is launched.” This shows how the market views Air India as a company of tremendous value and potential, he said.

Sources said IndiGo's plan appear to be consolidating its international market as it has already consolidated its “numero uno position” in the domestic market.

Sinha said more players, including international players, have shown interest informally but IndiGo is the first formal one. There were speculation last week that the Tata Group have met top government functionaries and expressed interest in buying Air India.

The Union Cabinet on Wednesday gave an "in principle" go ahead for the strategic disinvestment of debt-ridden Air India after tasking a Group of Ministers led by Finance Minister Arun Jaitley to work out its modalities.

As the group of ministers are poised to start working, Civil Aviation Minister Ashok Gajapathi Raju said they would be meeting stakeholders, including former Civil Aviation Ministers.

"We want to make Air India an economically viable unit which entails element of privatisation. We will take the opinion of former Civil Aviation Ministers too for Air India," he said adding that one cannot keep taxpayers' money for eternity to run an airline.

Sinha said the consultative process would start with interactions with former aviation ministers. Aviation experts, Air India management and employees will also be consulted before taking a final decision.

Echoing Raju, he said the brand name Air India has an economic value which will be attractive for private players.