Eye on domestic dominance, Jet Airways and SpiceJet may bid to acquire ailing carrier Air India

 BusinessToday.in   New Delhi     Last Updated: November 30, 2017  | 17:32 IST
Eye on domestic dominance, Jet Airways and SpiceJet may bid to acquire Air India

Though the government's plan to privatise flag carrier airline Air India is on hold for long, many new players are gearing up to grab a piece of cake if the Centre floats the disinvestment plan. Till now, only Tata joint ventures, AirAsia India and Vistara, and IndiGo Airline have shown interest, but now Jet Airways and Spicejet are reportedly also planning to bid for buying the ailing national carrier.  

The Times of India quoted an unidentified source saying with its 14 per cent domestic and 17-18 per cent international market share, getting Air India would be a paradigm shift for whichever airline gets Air India, and that Jet Airways and even SpiceJet would have no option but to bid for Air India.

The government think tank Niti Aayog has suggested complete privatisation of the airline, which has a debt burden of over Rs 52,000 crore. The ministry of civil aviation is looking at ways to revive the airline surviving on Rs 30,000 crore bailout package extended by the previous UPA regime.

With such a domestic market share of 14 per cent, the carrier is an attractive buy for airlines but mounting debt burden may pose hurdles. However, the TOI source said, the government was planning to sell a clean carrier to prospective bidders by putting all the tricky aspects like real estate in an SPV.
Jet Airways, being the second largest airline in India, is extensively trying to enhance its national as well as international presence. Though nationally it faces a tough challenge from IndoGo, the Air India acquisition could give it a much-needed fillip.

Jet Airways also announced partnership with Air France-KLM on Wednesday to increase the number of flights to Europe, especially Paris and Amsterdam, and expand further connectivity to the United States. The partnership between the two could, however, hurt the business prospects of major Gulf career Etihad Airlines, which owns 24 per cent stake in Jet Airways, but the pact would help Jet Airlines expand its footprints internationally.  

 

Youtube
  • Print

  • COMMENT
A    A   A
close