Would IndiGo be interested in Air India? asked an analyst at IndiGo's post-results conference call on January 27.
"No comments," replied IndiGo CEO Ronojoy Dutta.
To industry observers, the comment is more like a glass half-full, than half-empty.
And that's because of three reasons. One, the government has decided to completely exit from Air India, and will sell 100 percent of its share. That means a new investor will have complete control over the operations.
At the same time - the second reason - the government wants an Indian investor to call the shots at Air India, after the divestment. That again will be an advantage for IndiGo.
Third, India's largest airline was open about its interest in Air India when the government last called for expression of interest, in 2018.
Though IndiGo eventually decided to stay away from Air India, it will surely check on what the government's view is on one critical factor: Will the government be open to separating some of Air India's operations, and sell them individually?
In 2018, IndiGo went public on its interest in acquiring only the international operations of Air India, and that included the latter's low-cost arm Air India Express. Two years on, the Gurugram-based airline hasn't yet commented on Air India divestment, but it will loath to pass on an opportunity to acquire some of the assets.
More so now, because IndiGo is rapidly expanding internationally. It started flying to seven new international destinations in the third quarter of the present financial year. In all, IndiGo now flies to 23 international cities.
How will Air India and Air India Express add to it?
The combine will command an overall share of 18.6 percent of the international market, flying to 45 overseas destinations. Also, Air India has 2,738 international slots, and has code share agreement with 25 airlines.
This will be significant for IndiGo, which as Dutta pointed out in the conference call, is now deploying half of its new aircraft on international routes.
Interestingly, Sanjiv Kapoor, the former Vistara veteran, took to Twitter to advocate the government to sell Air India in four parts. These included selling the international operations, and Air India Express, separately.
But what if the government doesn't want to sell Air India piecemeal? Will IndiGo back out?
Rahul Bhatia, IndiGo's co-founder, gave the answer, two years ago.
".... if the Government of India decides to sell all of Air India’s airline operations and, I emphasise “airline operations”, to a single entity and not carve out the international operations, we would still be interested in exploring that option."
It's difficult to tell if that view has changed two years on. But surely, it will be worth tracking.
Other takeaways
The following is what Dutta and rest of IndiGo's senior management said on several other issues in the conference call.
On the impact of coronavirus outbreak on travel: The company is monitoring the situation closely, even as cancellation have started coming in. It will take a call on continuing services to China, in the coming days. IndiGo operates two daily flights to China.
On engine replacement of Neo: Company has replaced 60 percent of engines in its Neo fleet. The executives added that the airline will meet the May 2020 deadline. The DGCA had recently extended the deadline.
On capacity expansion: The fleet expansion rate will be about 20 percent in FY21. The present financial year will end with the company expanding capacity by 23 percent. The expansion has been hit by the Neo engine problem, and also a delay in deliveries by Airbus.
On aircraft utilisation: The rate will improve from June onwards, after the engine troubles are resolved and more pilots join operations, after training. At present, 400 pilots are undergoing training, down from 600 in the second quarter.
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