IndiGo’s CEO Rahul Bhatia says open to acquiring airlines

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Mumbai | Published: October 25, 2018 5:35:32 AM

IndiGo co-founder and interim CEO Rahul Bhatia, in an investor call, on Wednesday said that the airline will look at any opportunity that the current aviation market throws up along with its growth strategy of growing organically.

IndiGo, IndiGo CE Rahul Bhatia, Jet Airways, Air India acquisition, IndiGo market share An acquisition of Jet by IndiGo will definitely give the airline the much-needed slots and scale both in the domestic and the international market, making it an undisputed market leader.

IndiGo co-founder and interim CEO Rahul Bhatia, in an investor call, on Wednesday said that the airline will look at any opportunity that the current aviation market throws up along with its growth strategy of growing organically. This could be interpreted, analysts said, to mean Indigo maybe eyeing Jet Airways, which is financially strapped. In a response to a question by an analyst over Air India’s failed acquisition attempt and also if IndiGo will be looking at other opportunities that the current market is likely to throw up as some carriers (Jet Airways) are in a weak position, Bhatia said, “We will look at it opportunistically and if something came around and if it is too good a deal to say no, we will certainly look at it.”

Both IndiGo and the Tatas were interested in Air India acquisition to scale up their international as well as domestic operations as the government announced an intent to privatise the loss-making public carrier but the move fell through due to various reasons, one of them being the control as the government wanted to keep 24% equity in the carrier, which airlines were not comfortable with and IndiGo was looking at just the international operations of the carrier and wanted a piecemeal deal to which the government was not amenable then.

IndiGo that announced a loss of Rs 652.1 crore for the second quarter of the current fiscal on Wednesday said that it will stay steadfast on its policy to grow organically and continue to add capacity that is higher than its peers in the market but Bhatia added, “That you have something that is going around in the market and we we will decide at that point and if whatever happens is beneficial for us and better than what we are doing right now or we build our business organically,” he was responding to the question of some weaker airlines dying on their own in the current market.

An acquisition of Jet by IndiGo will definitely give the airline the much-needed slots and scale both in the domestic and the international market, making it an undisputed market leader. The fastest expanding carrier in India is finding the infrastructure constraints and slot constraints the biggest challenge to its growth as it continues to add aircraft at a rapid pace. IndiGo’s market share for the second quarter is 42.4%, up from 40.7 %, while Jet Airways suffered a loss in its share at 13.8%. IndiGo, for the current quarter, will increase its Available Seat per Kilometers to 35%. For the second quarter alone, it added 20 aircraft and is a 189-fleet airline, connecting 1,300 city pairs.

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