Jet Airways has decided not to bid for stake in Air India, becoming the second major Indian airline after IndiGo to pull out of the race, the Financial Times reported on Tuesday. “Considering the terms of the offer in the information memorandum and based on our review, we are not participating in the process,” said Amit Agarwal, the deputy chief executive of Jet Airways.
Analysts said Jet Airways made the decision because the buyer has to take on Rs 33,390 crore of Air India’s total debt of Rs 48,700 crore. This dissuaded the airline as it is trying to pare its own debts.
On March 28, the government invited bids to divest 76% stake in the national carrier airline through transfer of management, control and sale of equity share capital. It had issued a preliminary information memorandum on Air India’s strategic divestment.
Although Jet Airways had not openly expressed interest in buying stake in Air India, it had discussed the subject with investors and its alliance partners Air France-KLM and Delta, the Business Standard reported. The two international airlines were not keen to bid for the debt-ridden airline either as they believe they would not give them enough scope to grow in India.
On April 5, IndiGo withdrew from the race to acquire stake in state-run Air India, saying that the terms set by the government were not unsuitable for the private company. “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.