Air India must have reigned the airspace of India and overseas since long but the national carrier is now witnessing its downfall with the company going in heavy losses. Now the Union Cabinet has also extended it’s in- principle approval on disinvestment of government’s stake in the national airline, Air India Ltd and issued clearance on its privatization. Though before the Cabinet’s approval it was speculated that Tata Sons Limited, a venture of Tata Group will take over the airline operations but within an hour of the clearance, country’s domestic player, IndiGo has also expressed its interest to bid for Air India.
Though before the Cabinet’s approval it was speculated that Tata Group will take over the airline operations but within an hour of the clearance, country’s domestic player, IndiGo has also expressed its interest to bid for Air India.
Tata and Indigo interested in Air India bid
Indigo must be just a few years old in the aviation industry but it has now become India’s largest domestic airline to contribute the maximum of the air traffics on the various air routes across the country. The later eyes on buying the stake in national carrier enhancing the government’s plan to sell off the company who is under the debts of $8 billion. Tata Group who has roots of Air India in its initial stages is also a strong contender in the final showdown and is showing interest in acquiring the company of many billion dollars. Tata Group is global enterprise and its Tata SIA Airlines Ltd already has stakes in the Singapore Airlines operations in India by the name of Vistara.
The budget carrier, Indigo run by InterGlobe Aviation Ltd. is mulling on extending their overseas network by acquiring the fleet of Air India aircraft. It has also written to the government showing its interest in Air India bid. However, it is also speculated that the higher authorities of Indigo might also back out if they don’t find the deal profitable.
More about Air India’s tale towards downfall
The appeal of writing of almost 8% of the debts of the national carrier, Air India will now entirely depend upon government. Air India fetches two-thirds of its revenue from the international segment alone while 14 percent is the only domestic market share. The company has made several losses over ten years and this is how the debt on Air India has grown steadily till date.