IndiGo interested in buying out AI's flight operations
Low-cost carrier IndiGo has written to the ministry of civil aviation expressing an interest in buying out Air India's flight operations.
IndiGo President Aditya Ghosh wrote a letter to Civil Aviation Minister Ashok Gajapathi Raju soon after a Cabinet decision on Wednesday giving an in-principle approval for the consideration of Air India's disinvestment.
"IndiGo has written a letter with an unsolicited expression of interest (EOI) in the divestment procedure of Air India," Civil Aviation Secretary R N Choubey said on Thursday.
IndiGo said in the letter it would be interested in buying out the international operations of Air India and its low-cost wing, Air India Express.
If that was not possible, it would like to buy out the entire Air India flight operations, including domestic flights, Ghosh said in the letter.
"Many other private players, both domestic and international, have approached us. The first formal expression of interest is from IndiGo," Minister of State for Civil Aviation Jayant Sinha told the media here.
IndiGo is currently the market leader in terms of its share in the domestic aviation market. In May, it recorded a 41.2 per cent market share, followed by Jet Airways at 15.2 per cent and Air India with 13 per cent.
The Cabinet has decided to form an Air India-specific Alternative Mechanism headed by the finance minister and including the civil aviation minister and others.
It will look into five terms of references which include the treatment of unsustainable debts of Air India, hiving off certain assets to a shell company and de-merger and strategic disinvestment of three profit-making subsidiaries.
It will also decide on the quantum of disinvestment in Air India and the universe of bidders.
The first step will now involve constituting the Alternative Mechanism comprising various ministers. After that, the Department of Investment and Public Asset Management (DIPAM) will float an agenda note to the group of ministers with the terms of references, Choubey told reporters.
"We want a great global airline and need to resolve these five issues," said Sinha.