IndiGo will pursue Jet Airways if Air India bid fails
IndiGo, run by billionaire aviation entrepreneurs Rahul Bhatia and Rakesh Gangwal, was the first to show its interest in buying Air India, when the government decided to sell stakes of the state-run airline. However, if this deal doesn't come through, InterGlobe Aviation Ltd-run IndiGo plans on investing in Jet Airways (India) Ltd, say reports. Here's more about it.
According to Mint's source, if the plan of acquiring a stake in the airline fails, Indigo will then take up the organic route for growth, although it is "a slower process." The source also confirmed that IndiGo intends to acquire only the international business of Air India because it will give the firm access to Air India's international flying rights and slots.
If the government insists that the state-owned airline's domestic operation has to be acquired with its international one, IndiGo intends to break up the domestic operations of Air India into four parts (based on their spread) and would negotiate to acquire only one of them along with the international operation. If that isn't okayed, it'll start looking for alternatives, one of which is Jet Airways.
If buying a stake in Jet Airways doesn't pan out either, IndiGo will look at ordering wide-body planes from Boeing Co. or Airbus SE in order to start its own international operation. This will be the last resort and a "very slow process" for the airline to go through. Jet Airways refused to comment on stake sales or talks with IndiGo.
IndiGo plans on adding 50 ATR planes and several A320neo planes over the next year and aims at making its fleet 350 planes-strong within the next few years. It is already the largest domestic airline in the country with a fleet of 139 planes at its disposal. However, with this rapid pace of growth, it's also encountering new challenges.
The person privy to the matter said, "No Indian management of an airline has operated even a 200-aircraft fleet and IndiGo knows this." Therefore, the airline is mulling on bringing in expat managers at the top ranks to manage operations, as it's expanding at a rapid pace. It has also started spotting, promoting and attaching in-house talents to these new international executives.