IndiGo backs out of Air India race

On March 28, the ministry came out with the preliminary information memorandum on Air India’s disinvestment.

India’s largest airline IndiGo, which was the first entity to evince interest in participating in Air India’s disinvestment, backed out on Thursday citing that the option to acquire only the international airline operations of Air India and Air India Express was not available under the divestiture plan of the government.

“From day one, IndiGo has expressed its interest primarily in the acquisition of Air India’s international operation and Air India Express. However, that option is not available under the government’s current disinvestment plan for Air India,” IndiGo’s President and Wholetime Director Aditya Ghosh said. “Also, as we have communicated before, we do not believe we have the capability to take on the task of acquiring and successfully turning around all of Air India’s airline operations,” he added.

On March 28, the ministry came out with the preliminary information memorandum on Air India’s disinvestment. The government plans to offload 76 per cent equity share capital of the flag-carrier as well as transfer the management control. The proposed transaction would involve Air India, its low-cost arm Air India Express and Air India SATS Airport Services Pvt Ltd, which is an equal joint venture between the national airline and Singapore-based SATS Ltd.

IndiGo’s founder Rakesh Gangwal, in July last year, had raised concerns over having a joint ownership with the government in Air India during a conference call with analysts, suggesting it was a “very very difficult proposition”.