After India’s largest airline IndiGo had expressed its interest in buying the troubled national carrier Air India, aviation handling service provider Bird Group too has expressed interest in investing in the state-run giant. Bird Group, which provides various aviation services such as aircraft navigation, ground handling, customer management and logistics has reportedly formally written to the Civil Aviation Ministry expressing its interest in the debt-ridden Air India.
Bird Group told ET Now that they have asked the government to spin-off Air India’s ground handling services, in which the company is looking to invest. The state-run behemoth Air India has the largest ground handling services in the country, it also does ground handling for other carriers.
CNBC TV18 reported that that the Civil Aviation Secretary has confirmed the development. The civil aviation secretary said that Bird Group is the second company to show official interest in owning an equity stake in Air India.
Finance Minister Arun Jaitley said that the group of ministers is slated to meet today evening to discuss the Air India divestment process. Further, he said that decision on the disinvestment of Air India needs to be taken expeditiously.
Led by Ankur Bhatia, Bird Group has been in the industry for more than 45 years. The company is headquartered in New Delhi, and does ground handling at major Indian airports.
Earlier, IndiGo said that it is interested in buying Air India’s international operations. Given IndiGo’s leadership in the domestic market with a whopping 41% share and its aggressive plans to expand overseas,it augurs well for the company.
Air India is a distant third largest player in the Indian civil aviation market with a paltry 14% share. While that revenue would be a welcome addition to IndiGo’s kitty, it is Air India’s leadership in overseas passenger traffic with 17% of the international skies in its portfolio which is the main attraction for IndiGo, which itself has major ambition to quickly start adding international destinations to its network.
Air India, under intense competition from leaner, more efficient and often-cheaper private airlines, is reeling under a debt of over Rs 52,000 crore, with about Rs 28,000 crore in working capital debt, and about Rs 4,000 crore in interest burden alone. It has not turned profit in 10 years, since at least the year 2007.
Air India has guzzled up taxpayer money over and over again but to no effect. The carrier has received bailout packages worth about Rs 24,000 crore out of a total Rs 30,000 crore approved, but has failed to revive its fortunes amid private airlines continuously gaining market share.