IndiGo clears the air: Management says airline keen on Air India's international units

Following a board meeting, budget airline IndiGo announced on Thursday it is not interested in buying national Air India's entire operations.

The low-cost carrier is focused on Air India's international operations and Air India Express and has concerns about acquiring all of Air India's business, IndiGo promoter Rakesh Gangwal said in a concall.

The management said that they do not have a desire to take all of Air India's debt and that acquiring all of Air India's subsidiaries is an "impossible task".

Gangwar also said that it was about time that IndiGo enters the long-haul international market, with or without Air India. The journey to a making IndiGo a global low cost carrier will be gradual, he added.

The IndiGo management said that Air India would provide rapid growth for India's largest carrier by market share.

Another promoter Rahul Bhatia said IndiGo is not looking at having a joint-ownership of Air India with the government.

Soon after the government gave an in-principle approval for disinvestment of Air India, IndiGo, owned by InterGlobe Aviation, had expressed unsolicited interest in buying a stake in the state-owned carrier.

The Union Cabinet on June 28 had given an in-principle approval for disinvestment of debt-laden state-run carrier Air India.

Stretched thin by competition from leaner and budget airlines, Air India is reeling under a debt of over Rs 52,000 crore, with about Rs 28,000 crore in working capital debt, and about Rs 4,000 crore in interest burden alone. The national carrier has not turned profit in 10 years.

From commanding a 35% share in mid 2000s, Air India’s domestic market share has reduced to just 14%. The airline stands behind IndiGo and Jet Airways in the pecking order. On the overseas traffic to and fro India, it has a 17% share.

Earlier in June, Tata Group chairman N Chandrasekaran had informal talks with the government. Media reports also suggested that the Tatas could get Singapore Airlines on board for a minority stake.