IndiGo is no longer buying Air India
What's the story
IndiGo, India's largest domestic air carrier, which was among the first to express interest in buying Air India after the government announced its disinvestment, has now backed out, saying it doesn't have the capability required to successfully take on the airline's operations. Notably, 76% of stakes of Air India are up for sale. Read on know more.
Explanation
Why did Indigo back out?
"That option (Air India's acquisition) is not available under the government's current divestiture plans for Air India," Aditya Ghosh, director-president of InterGlobe Aviation Ltd, the company behind IndiGo, said in a statement. "Also, 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," he further added.
Plans
Air India's sale to help India achieve 2018-19 disinvestment target
The government also plans to sell 100% of Air India Express Ltd, the airline's low-cost international carrier and 50% of its airport ground-handling venture, SATS Airport Services. Part of the 24% stake that it will retain, the government shall transfer to employees under a stock option scheme. Air India's sale should help India achieve its mammoth Rs. 80,000 crore disinvestment target for 2018-19.
Criteria
Buyers should be Indian, must retain the name Air India
The civil aviation ministry wants Indian entities to buy the airline and retain its name Air India. Potential buyers are expected to have a minimum net worth of Rs. 5,000 crore (doesn't apply to Indian airlines) and must have reported profits after tax in at least three of the last five years. Interested parties can respond by 5pm on May 14.