Top Indian carrier Interglobe Aviation Ltd, which operates under the IndiGo brand, said on Thursday it was opting out of a race to acquire state-run Air India as the terms set by the government would not suit it.
The Indian government, which fully owns money-losing flag carrier Air India, last week released bid documents seeking to sell a 76 percent stake in the carrier that operates both domestic and international routes.
The proposed sale will also include a 100 percent stake in Air India’s low-cost arm - Air India Express, and a 50 percent stake in its ground-handling arm - SATS Airport Services.
“From day one, IndiGo has expressed its interest primarily in the acquisition of Air India’s international operations and Air India Express. However, that option is not available under the Government’s current divestiture plans for Air India,” IndiGo said in a statement.
“We do not believe that we have the capability to take on the task of acquiring and successfully turning around all of Air India’s airline operations,” said Aditya Ghosh, the airline’s president, in the statement.
IndiGo, Indian conglomerate Tata Group, and Turkey’s Celebi Aviation Holdings, have expressed an interest in buying some of Air India’s operations. Singapore Airlines has also said the company has an open mind about making an initial bid.
Indian Prime Minister Narendra Modi’s cabinet gave the go-ahead last year to sell Air India after successive governments spent billions of dollars to keep it solvent.
But its debt burden of about $8 billion and a bloated cost structure have been a concern. Previous attempts to offload the airline have been unsuccessful.