SpiceJet ‘Not Strong Enough’ To Buy Air India: Chairman Ajay Singh

SpiceJet airlines. 

(Photo: Reuters)

SpiceJet Ltd is too small an airline to acquire Air India, Chairman and Managing Director Ajay Singh told BloombergQuint, a day after its rival IndiGo expressed unsolicited interest in the debt-laden national carrier.

“We are not strong enough, or large enough to take on a large company like Air India,” Singh said at the launch of SpiceStyle, the e-commerce venture of the low-cost airline. The state-owned airline is a great asset which needs to be restored to a “glorious position in aviation”, he added.

The government on Wednesday gave its in-principle nod to sell a stake in Air India, which is currently saddled with a debt of over Rs 50,000 crore. It will set up a panel under Finance Minister Arun Jaitley to finalise the modalities.

InterGlobe Aviation Ltd, which runs the market leader IndiGo, expressed interest in buying Air India's international operations, or alternatively, the whole airline itself.

Besides IndiGo, there are other domestic and foreign carriers who have indicated their interest in buying Air India, Minister of State for Civil Aviation Jayant Sinha told BloombergQuint without naming the interested parties.

However, the SpiceJet chairman said it wouldn’t be in India’s best interest to allow a foreign airline to pick up stake in Air India.

It will be detrimental if you allow a foreign airline to come and buy Air India and then take traffic and bilateral rights and reinforce the hubs in their own countries. 

Ajay Singh, Chairman and Managing Director, SpiceJet

Singh added that the government should look at its own strategic interests which lie in ensuring that Indian airports become international hubs and Indian airlines become global carriers.

Singh himself is no stranger to turning around a stressed airline, having done the same for SpiceJet in 2015. The airline, then run by Kalanithi Maran and KAL Airways, faced financial difficulties and its entire fleet was grounded as it failed to pay dues including fuel bills.

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UDAN Takeoff

SpiceJet will begin operating flights on the routes that it won under the government's regional connectivity scheme UDAN (Ude Desh Ka Aam Naagrik) from 10 July.

The airline will start with Mumbai-Porbandar and Mumbai-Kandla routes, Singh said adding that he expects all of SpiceJet's UDAN flights to be operational before September.

SpiceJet was awarded six proposals and 11 routes in the first phase of the Modi government's plan to connect underserved and unserved airports. Out of the six proposals, four will cater to unserved markets of Adampur, Kandla, Puducherry, and Jaisalmer whereas two will be for under-served markets of Porbandar and Kanpur, the airline said. It will fly the smaller Bombardier Q400 aircraft on these routes, Singh said.

(This article was originally published on BloombergQuint)

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