India’s IndiGo airlines decided not to buy stake in loss making Air India, citing heavy resources required in terms of investment to turn around the state-owned airline Air India.
The Government of India announced last month to sell 76% stake in the national carrier Air India, which includes Air India Express and a 50% stake in groundhandler Air India SATS Airport Services.
The analyst predicted that IndiGo would step in and acquire large stake as it was expanding rapidly in Domestic and International routes., But according to IndiGo’s president Aditya Ghosh, the airline was focusing on acquiring Air India’s international operations and low-cost carrier Air India Express. Since the divestiture plans for sale of Air India is not available, IndiGo decided to pullout its interest.
IndiGo also said that they don’t have the capability of acquiring and successfully turn around all of Air India’s airline operations as one entity as buyer would have to take on about two-thirds of its $7.8 billion debt.
The IndiGo owners Rahul Bhatia and Rakesh Gangwal had said earlier that IndiGo will pursue its ambition of expanding to International operations with or without Air India.