Virgin group owner and billionaire Richard Branson said Friday that he was looking at an opportunity to invest in India’s domestic aviation sector but the current market conditions were “quite difficult”.
“We can have a look at the domestic market for opportunities, but right now, with the number of carriers and the overcapacity, the market is quite difficult,” he said. “It is not impossible that we will invest in an Indian carrier, but we would need to see an obvious opportunity.”
Although the Indian government opened up the aviation sector to foreign direct investment of up to 49% last month, interest has been muted from foreign carriers.
“In part, it is just the timing,” said Steve Ridgway, CEO, Virgin Atlantic. “We are in the middle of a long running recession, so we need to see some recovery. Also, the Indian aviation market needs some rationalisation in the number of carriers and capacity.”
Commenting on the distressed Indian aviation market, Branson said that even though overcapacity will lead to casualties of some carriers, the customer will benefit.
“India has nothing to be ashamed with airlines going bankrupt,” he said. “Every single American airline I was competing against has gone bankrupt and come back.”
Branson also said that liquor-baron Vijay Mallya deserved credit for trying to find a way to keep his tottering airline alive.
“It was very good news that they agreed to pay the staff,” said Branson. “I hope he manages to keep flying.”