JOIN USNo-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 given an in-principle clearance to 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.
“First and foremost, IndiGo is not looking at acquiring all of Air India’s businesses and subsidiaries. In our view, that would be a herculean task which would at best be a very challenging proposition and at worst an impossible task, unless an organization is willing to fund large losses for a very long time,” Bhatia said.
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.
“This exercise is not about becoming bigger for the sake of being bigger – it is all about profitable growth and that is a bedrock principle at IndiGo borne out in our performance of the last ten years,” 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 further said even if they acquire Air India, they would not go full-service as that model does not work for IndiGo. “If we enter this space, we will do so with a low-cost model...We will venture into long-haul low-cost international operations with or without Air India,” he said.