Bird Group eyes Air In­dia sub­sidiary

Mint ST - - DEALS - BY TARUN SHUKLA tarun.s@livemint.com NEW DELHI

Gurugram-based travel com­pany ex­presses in­ter­est in bid­ding for the ground-han­dling busi­ness of the na­tional car­rier

Gurugram-based travel firm Bird Group has ex­pressed in­ter­est in bid­ding for Air In­dia Ltd’s ground han­dling sub­sidiary as part of the sta­te­owned air­line’s pro­posed pri­vati­sa­tion.

“This is the sec­ond for­mal in­ter­est for Air In­dia we have re­ceived,” avi­a­tion sec­re­tary R.N. Chaubey told re­porters on Wed­nes­day, ahead of an avi­a­tion con­fer­ence in New Delhi.

In­ter­globe Avi­a­tion Ltd, which runs Indigo, ear­lier showed in­ter­est in Air In­dia, mainly its in­ter­na­tional op­er­a­tions.

“We have sent an ex­pres­sion of in­ter­est in Air In­dia’s ground han­dling sub­sidiary,” Ankur Bha­tia, ex­ec­u­tive di­rec­tor of Bird Group, said on the phone from Lon­don where he is on a visit.

Bird Group was founded in 1971 with the set­ting up of Bird Trav­els; it now has 45 of­fices and a staff of 9,000. The group has in­ter­ests in tech­nol­ogy, avi­a­tion ser­vices, hos­pi­tal­ity, lux­ury re­tail and ed­u­ca­tion. The group runs BMW and Mini Cooper sales out­lets, among oth­ers.

Bird Group also pro­vides ground han­dling ser­vices to air­lines.

Air In­dia Air Trans­port Ser­vices Ltd (AIATSL) pro­vides ground han­dling ser­vices at about 70 air­ports, is prof­itable and has about 12,000 em­ploy­ees. AIATSL earns an­nual rev­enue of Rs700 crore, gen­er­at­ing a profit of Rs100 crore, said an Air In­dia of­fi­cial who did not wish to be named.

Ground han­dling is a lu­cra­tive busi­ness and in­volves han­dling many ser­vice re­quire­ments of an air­liner be­tween the time it ar­rives at a ter­mi­nal and the time it de­parts on its next flight.

While Bird Group is keen on Air In­dia’s ground han­dling ser­vices, an ac­qui­si­tion will de­pend on how the gov­ern­ment struc­tures the sale that will de­fine the road ahead for the group, Bha­tia said. The Cab­i­net Com­mit­tee on Eco­nomic Af­fairs (CCEA), in a meet­ing on 28 June, gave in-prin­ci­ple ap­proval for the strate­gic dis­in­vest­ment of Air In­dia and its five sub­sidiaries and also ap­proved the ap­point­ment of ad­vi­sors for the process.

Be­sides In­ter­globe Avi­a­tion, pri­vate eq­uity firms KKR and Co. and War­burg Pin­cus are con­sid­er­ing throw­ing their hats in the ring for Air In­dia, Mint re­ported on 23 July.

Coin­ci­den­tally, Bird Group’s Ankur Bha­tia and In­ter­globe’s group man­ag­ing di­rec­tor Rahul Bha­tia are dis­tant cousins. Both fam­i­lies mi­grated to In­dia from what is now Pak­istan and got into the travel busi­ness, which they have ex­panded man­i­fold.

An analyst who did not wish to be named said there was ex­cep­tional in­ter­est in Air In­dia, both from com­pa­nies seek­ing a chunk of the air­line’s busi­ness and from con­sul­tants and in­vest­ment bankers who would want to be in on the deal as ad­vi­sors.

“Its a mar­quee deal. Peo­ple will do it for Re1 just to have it on their re­sume,” he said.

Mean­while, a group of min­is­ters ap­pointed by the Union cab­i­net to look into dis­in­vest­ment of Air In­dia held its sec­ond meet­ing on Wed­nes­day.

Fi­nance min­is­ter Arun Jait­ley, civil avi­a­tion min­is­ter Ashok Ga­jap­athi Raju, rail­way min­is­ter Suresh Prabhu, power min­is­ter Piyush Goyal and trans­port min­is­ter Nitin Gad­kari are part of the group.

Gad­kari ear­lier this last month said profit-mak­ing sub­sidiaries of Air In­dia should be kept out of pri­vati­sa­tion.

“Any busi­ness that is prof­itable should be en­cour­aged by the gov­ern­ment,” he said.

AB­HI­JIT BHATLEKAR/MINT

In­ter­globe Avi­a­tion Ltd, which runs Indigo, ear­lier showed in­ter­est in Air In­dia, mainly its in­ter­na­tional op­er­a­tions.

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