IndiGo wants to buy Air India

IndiGo wants to buy Air India

Air India being in trouble is not a new story. The days when it and Indian Airlines dominated feel a long time ago. It has since racked up around $8 billion in debt and is losing market share to new Indian low cost carriers.

After struggling along the past few years, the airline went private on Wednesday following approval from the Indian Government. Only a day after the approval, India’s largest airline IndiGo stepped in offering to buy the failing airline.

IndiGo submitted an expression of interest to buy all of Air India’s operations (including Air India Express) in a letter from the company’s president.

Even one of India’s most daring billionaires said he wouldn’t touch the airline, but IndiGo have a lot to gain from buying Air India.

It’s no secret that IndiGo are looking to take over passenger flights in the region. The carrier holds 41.2% of the country’s airline market share, making it the largest airline in India – but this isn’t enough.

IndiGo want to operate the majority of flights in the region. As Air India’s market share sits around 13%, the acquisition would push the LCC to operating the majority of flights in and out of India at 54.2% market share.

India looks set to be one of the world’s fastest growing markets. But there are lots of cases where airline mergers have not been good for the buyers. Despite this, the low cost airline is not showing any doubts saying: “We would like to point out that our confidence and ability to build for our country one of the world’s largest international carriers is driven by the significant domestic network we have built over the years. In our view, no other carrier is better placed to realize this potential.”

Alex Baldwin
By Alex Baldwin July 4, 2017 09:35