Will not pursue Air India bid if not profitable: IndiGo President Aditya Ghosh to staff

IndiGo, the country's largest airline with a domestic market share of a little over 41 per cent, is keen on snapping up the international operations of Air India as well as its profitable low-cost arm Air India Express.

By: PTI | New Delhi | Published:June 30, 2017 2:48 pm
air india, air india privatisation, air india disinvestment, indigo, indigo president Aditya Ghosh, Aditya Ghosh, president of Indigo airlines wrote to IndiGo staff listing out the reasons behind the move and sought to assure them that every action would be in the best interest of the airline.

Having joined the race to buy out Air India, IndiGo President Aditya Ghosh has told employees that it will not embark on the journey if it is not profitable and jeopardises interests of the airline. Making its intention clear to become a world-class international carrier, IndiGo became the first airline to formally express interest in loss-making Air India soon after the government decided on its disinvestment even as the modalities are being worked out.

IndiGo, the country’s largest airline with a domestic market share of a little over 41 per cent, is keen on snapping up the international operations of Air India as well as its profitable low-cost arm Air India Express. As an alternative, the budget carrier is “equally interested” in buying out all the operations of Air India and Air India Express, according to the letter sent by Ghosh to the civil aviation ministry.

After showing its interest in Air India disinvestment — a development which was first announced by the ministry –Ghosh wrote to IndiGo staff listing out the reasons behind the move and sought to assure them that every action would be in the best interest of the airline.

“Let me be very clear that if it is not profitable and does not add value to our employees, customers and shareholders, we will not embark on this journey,” Ghosh, who is also a Whole-Time Director, told employees on Thursday.

“As one of those who bleed blue and who have helped build this great organisation, you can rest assured that your leadership team and the founders of IndiGo will never do anything to jeopardise what you helped build and will always act in the best interest of IndiGo,” he said.

Noting that IndiGo is primarily interested in Air India’s international operations, Ghosh said that over the past decade, a significant domestic network has been created which gives confidence to build a world-class international airline in the scale and scope of some of the largest airlines in the world.

With a fleet of nearly 135 aircraft, IndiGo operates over 900 flights on an average every day. Besides, the carrier has more than 450 planes on order.

In his letter to the employees about interest in Air India, Ghosh stressed that without IndiGo’s domestic feed network, it does not make sense to embark on this journey.

“… if we do go down this path, it would require significant restructuring of the acquired operations. In that journey, we are not going to take on debt and liabilities that could not be supported by the new restructured operations,” he noted.

Asserting that IndiGo will not embark on the journey if it is not profitable, Ghosh said the leadership team and the founders will never do anything to jeopardise what has been built.

As it pursues aggressive plans, IndiGo has also flagged concerns over some overseas airlines being given “disproportionate access” to the Indian aviation market.

“Over time, India has allowed disproportionate access to airlines of some of the city states in the Middle-East and South-East Asia. The massive hubs that these airlines have built significantly benefited at the expense of India.

“As a consequence of this, India’s international air transportation hubs reside outside the geography of our country. It is time for India to take back its fair share of international traffic and bring back this economic wealth to where it rightfully belongs,” Ghosh said in the letter, dated January 28, written to the ministry.

Before IndiGo made this letter public on Thursday, Civil Aviation Secretary R N Choubey had said IndiGo has written a letter with an unsolicited expression of interest in the divestment procedure of Air India.

The Cabinet has decided to form an Air India-specific Alternative Mechanism to take forward the disinvestment plan.

Various issues, including the treatment of unsustainable debt of Air India, hiving off certain assets to a shell company and de-merger and strategic disinvestment of profit-making subsidiaries, will be looked into. Air India has a debt burden of over Rs 50,000 crore and is staying afloat on taxpayers’ money.

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  1. P
    Pdias
    Jun 30, 2017 at 9:45 pm
    India’s international air transportation hubs reside outside the geography of our country. It is time for India to take back its fair share of international traffic and bring back this economic wealth to where it rightfully belongs - Govt should support this request fullest.
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      B. Raghuram
      Jun 30, 2017 at 3:35 pm
      The Govt. should take a call ASAP, irrespective of who the final suitor is. In today's scenario, the TATAs may not be the right suitor as the bloated egos will only push the investment into a loss as dealing with the incompetent Air India staff is an UPHIL task for any investor.
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        Asish
        Jun 30, 2017 at 5:33 pm
        India should be very careful about who to give Air India, it would be better to give it to Tata than to give it to anybody. They maintain standards, discipline and try the cost structure and money cutting from economics, Indigo is trying to jump more than the reach, they will not only collapse Indigo like Kingfisher, they will take Air India with them. If that happens BJP will not be able to digest the repercursions of it. It would have proved that Jaitley is a useless Finance minister and has no business acumen and was favored for a personal reason by Modi.
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          Asish
          Jun 30, 2017 at 5:34 pm
          Tata was used to indicate a setup which maintains discipline in business. It can be anybody else who has shown discipline for atleast 20-30 years in business and who understands and goes great length to help save it, grow it and grow with it.
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            Asish
            Jun 30, 2017 at 5:37 pm
            Indian Government can do it by giving the 50 of Domestic to some other airline but still keep 50 with it. For International Government keeps the entire 100 with it. Air India brings Indians abroad back to India with guarantee and price. BJP Government should break this back into Air India and Indian Airlines, than as mentioned above give 50 of Indian Airlines to outside companies.
        2. S
          Shanky
          Jun 30, 2017 at 3:05 pm
          Ai should have been sold till end of 2015 or early 2016. After 2014 the govt tried for a year to push it in profit zone. Now also, it's not too late to sell it entirely.
          Reply