Indigo ends interest in buying Air India

NEW DELHI: India’s largest airline Indigo has pulled out of the race to acquire national carrier Air India, dealing a blow to the government’s privatisation campaign.

Indigo told the Bombay Stock Exchange late on Thursday that it was interested only in Air India’s international routes and not its domestic operations.

The government, which said last week it wants to sell a 76 per cent chunk of the debtladen carrier, wants the prospective buyer to take on all of Air India’s operations.

The government last week released bid documents on one of the country’s highestprofile asset sale in decades. The documents said the proposed sale would include a 100 per cent stake in Air India’s low-cost arm Air India Express, which operates in West Asia, and a 50 per cent stake in its groundhandling SATS Airport Services.

“From day one, Indigo has expressed its interest primarily in the acquisition of Air India’s international operations and Air India Express,” Indigo president Aditya Ghosh said in the statement to the stock exchange.

“However, that option is not available under the government’s current divestiture plans for Air India.

“Also, as we have communicated before, we do not believe that we have the capability to take on the task of acquiring and successfully turning around all of Air India’s airline operations.” Indigo publicly expressed interest in acquiring Air India’s international operating arm after the government first approved a sale in June last year. Once the country’s monopoly airline, Air India has slowly lost market share to new low-cost private players in one of the world’s fastest-growing airline markets.

Air India ran losses for nearly a decade after a botched merger in 2007 and has debts of around $7.67 billion according to government figures.