Air India Disinvestment: Qatar Airways and IndiGo likely to make a joint bid

The networth criteria that bidders must meet is likely to be fixed at Rs 1,000 crore, before they are allowed to put in bids

Published: March 21, 2018 2:24 PM IST

By Teena Jain Kaushal

Air India
Representational Image

According to reports, Doha-based Qatar Airways and India’s low cost carrier IndiGo are in talks to make a joint bid for debt-ridden Air India.

In order to give revive Air India, the government has been looking for buyers for disinvestment of the loss-making national carrier. Currently, Air India has debt burden of around Rs 50,000 crore while its market share is just around 14 per cent.

It has also been reported that networth criteria that bidders must meet is likely to be fixed at Rs 1,000 crore, before they are allowed to put in bids. The net worth has to be calculated on the basis of an existing formula under the Companies Act.

In Q3FY18 Indigo reported net profit of Rs 762.03 crore as compared to net profit of Rs 487.20 crore in the corresponding period of the previous year, registering a jump of 56.41%. The net profit also increased by 38.16% from Rs 551.55 crore compared to the previous quarter. Similarly, revenue in Q3 stood at Rs 6,177.88 crore, registering a growth of 23.89% from Rs 4,986.49 crore in Q3FY17. Compared to the previous quarter revenue grew by 16.76% as against Rs 5,290.98 crore of Q2FY18.

In the past, IndiGo had also shown interest in buying a stake in Air India. For IndiGo the deal would mean a higher market share in domestic flights as two airlines together account for more than a 50% share.  On the other hand Qatar is going through a crisis as several Arab countries have severed ties with it for its alleged supporting terrorism.

This is not the first time that Qatar Airways has expressed its interest in buying a stake in the aircraft. Earlier, on several occasions Qatar Airways had expressed its interest to buy a stake in IndiGo.

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