Jet Airways, SpiceJet may join race for Air India

5903Jet Airways (9W, Mumbai Int’l) and SpiceJet (SG, Delhi Int’l) may join other carriers, including IndiGo Airlines (6E, Delhi Int’l), Vistara (UK, Delhi Int’l) and AirAsia India (I5, Chennai), in a race to buy Air India (AI, Mumbai Int’l), the Times of India reported.

As the race for the state-owned carrier heats up, all major Indian airlines are now contending to buy the airline. While SpiceJet seems to be too small to succeed, Jet Airways is a very serious player, TOI’s sources indicate.

Jet Airways could hope for a backing from Air France-KLM with which it has recently signed an enhanced cooperation agreement, or from Etihad Aviation Group which holds a 24% of the company’s shares. The airline itself is a larger player than Air India. According to the ch-aviation capacity module, Jet Airways has a 14.74% market share in India, while the state-owned carrier controls 12.04% of the market by capacity.

Times of India notes that Jet Airways will face a tough competitor in IndiGo Airlines, the low-cost carrier keen to acquire Air India to enter the international mid- and long-haul markets. IndiGo might get a financial injection from Qatar Airways which has long been eyeing the fast-growing LCC. The airline currently holds a 32.42% market share in India by capacity, the ch-aviation capacity module shows.

Among other rumoured contenders, SpiceJet has a 9.77% market share by capacity in India. Vistara, a Tata Group and Singapore Airlines joint-venture, holds a 2.84% share, while low-cost carrier AirAsia India holds 3.48%.

While the Indian government has publicly declared its intention to privatise Air India, so far no details of the process have been revealed. It remains unknown in what mode, when and to what an extent the government will divest Air India.

“The government is going to sell a clean Air India to prospective bidders by putting all the tricky aspects like real estate in an SPV. We have devised a mode where the new owner will get a clean airline free of most of its past baggage,” said a top government source cited by Times of India. The privatisation is opposed by Air India’s staff.

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