Foreign Carriers Show Interest in Buying Air India as IndiGo, Jet Airways Quit Race

Days after domestic airlines like IndiGo and Jet Airways fell out of the running to buy Air India after a disagreement with the terms of sale, international airlines such as British Airways and Singapore Airlines have shown interest in buying the Indian state-run carrier, Fortune India reported citing a senior Air India official.

So far, only Etihad Airways and Singapore Airlines have confirmed their interest in buying the national carrier in which the Indian government plans to sell a 76 per cent stake. David Lim, the general manager of Singapore Airlines had said to the magazine in an earlier interview: “We are open to bidding for Air India. What attracts us is the carrier’s massive network in India. We don’t have that kind of access to the Indian market, and Air India gives us that opportunity.”

Etihad Airways also believes that Air India’s bilateral rights, aircraft fleet and airport slots will add a lot of value to its business. “We have been eyeing the Indian market, and this seems to be the perfect opportunity provided the deal favors the buyer,” an Etihad Airways official was quoted as saying in the report.

However, the Air India official who spoke on the condition of anonymity, said that British Airways, German airlines Lufthansa, Etihad Airways, Singapore Airlines and Malaysian Airlines are all keen to buy Air India.

“We have received a lot of informal interest from foreign carriers because of Air India’s massive domestic and international network. The Indian government is considering these global airlines as serious contenders for Air India,” the official said. “These carriers are looking for Indian partners for the bid. We still don’t know whether Singapore Airlines will bid through domestic airlines Vistara or through another partner. Those details have not been communicated to us, but Singapore Airlines has expressed a lot of interest in the company.”

International Airlines Group (IAG), the parent company of British Airways, however, refused to comment over  the issue when approached by the Times of India.

The Indian government has released its Preliminary Information Memorandum (PIM), which spelled out the terms of Air India’s divestment plans. The government said it will sell 76 per cent of its stake in Air India and Air India Express, and 50 per cent stake in Air India SATS Private Limited.

As per the memorandum, a foreign player can only bid for Air India only in partnership with an Indian entity, with the foreign buyer taking a 49 per cent stake in Air India while the remaining 51 per cent will be with the Indian partner. Overseas carriers are in talks with Indian business houses to meet the criterion of substantial ownership and control, the Times of India reported.

The government has finalized May 14, 2018, as the last date for the Expression of Interest, following which intimation to the qualified interest bidders would be made on May 28.

Air India caters to 42 international destinations and over 70 domestic locations.