Singapore Airlines has an open mind about making an initial bid for a stake in state-run Air India, the head of the Singaporean carrier’s India business told Reuters on Thursday.
India said last week it would invite initial bids this month for a stake in the flag carrier. The cabinet approved the sale last year after successive governments poured billions of dollars into the indebted airline.
“India is a strategic market for Singapore Airlines. We have an open mind,” David Lim, general manager for India, said in an interview when asked whether Singapore Airlines would bid.
He did not elaborate.
Several companies have expressed an interest in buying some of Air India’s businesses, including low-cost Indian carrier IndiGo, owned by InterGlobe Aviation, Tata Group and Turkey’s Celebi Aviation Holdings.
India cleared a proposal in January to allow foreign investors to own up to 49 percent of Air India, opening the way for global airlines to bid.
Lim said Singapore Airlines had already shown its commitment to the Indian market by setting up Vistara, a full-service domestic carrier it jointly owns with India’s Tata Group.
He did not say whether Singapore Airlines would look at bidding for a stake in Air India alone or with Tata.
Singapore Airlines operates 98 flights a week to India and plans to increase that to 104 by summer. Its low-cost airline, Scoot operates 46 flights to India, while Vistara is expected to launch its first international flights this year.
Air India has six subsidiaries – three of which are loss-making – with assets worth about US$4.6 billion. It has an estimated US$1.24 billion worth of real estate, including hotels.
The carrier’s debt has ballooned to US$8.5 billion and India plans to transfer part of this into a separate unit before selling a stake in the carrier.
The government has injected US$3.6 billion since 2012 to bail out Air India which was founded in the 1930s and is known to generations of Indians for its Maharajah mascot.
Virgin Australia - Velocity Rewards
06 Sep 2012
Total posts 231
If Vistara/SQ can get themselves a solid slice of the Indian market it will set them well as it is forecast to be one of the biggest aviation markets in the years to come. It will also get them a share of the US/India market which are currently dominated by the ME3. The only hurdles are the low cost carriers which will be very competitive for short - medium routes.
22 Jan 2018
Total posts 99
Yes please SQ! I’d then happily fly the sfo-del !
Qantas - Qantas Frequent Flyer
11 Oct 2014
Total posts 691
I cannot see any valid reason why SQ would even entertain the idea of buying Air India outright.
SQ already set up Vistara - it's Indian domestic subsidiary. Vistara is set to pursue overseas rights from India. Additionally, SQ, Silk Air and Scoot all have access to the Indian market. And spending money which they don't really have right now - due to new fleet expenditure and low financial returns over the past two years.
Now, let's look at Air India. Loss-making, bureaucratically-bound, overstaffed .. and perennially affected by poor Government decisions when it comes to financial handouts and global air policy. Not a peach .. the merger of Air India and domestic Indian Airlines saw the combo effectively lose a large majority of it's domestic marketshare.
I would suggest that if anyone in Singapore is considering buying Air India ... it would be Temasek (the Singapore Government Investment body - and owner of SQ) rather than SQ itself. A Temasek purchase could represent a sensible 'turnaround' and resale project .. which they are known for. But even Temasek might baulk at Air India's problems.
Hi Guest, join in the discussion on Singapore Airlines considers a bid for struggling Air India