SpiceJet "too small" to snap up Air India, says Ajay Singh

In June 2017, the government had decided to exit fully or partially the national carrier, which is sitting on Rs 60,000 crore debt.

Mumbai: Ajay Singh, the chairman of low-cost carrier SpiceJet, has ruled his airline out of the race for the privatisation-bound Air India saying, "we are too small to bid for a large airline like the national carrier."

Addressing the annual aviation summit organised by industry consultancy Capa here today, he said, "Air India is a national asset and I am pretty that sure there will be many takers for it like the Tata-Vistara, Jet Airways, etc. But we are too small to bid for such a large asset."

The denial came at the same venue where Capa has named four domestic carriers including SpiceJet as possible bidders for the debt-laden national carrier. Others suitors, according to Capa, are the Tata-run Vistara, Jet Airways, and IndiGo.

Interestingly, Singh had told Press Trust of India last week that he would evaluate the Air India privatisation.

Parrying a direct answer he had said in an interview with Press Trust of India in Davos last week that "Abhi dekhte hain (Let's see)," when asked if he would look at the Air India stake.

The Capa report also said two non-aviation overseas players are keen on the airline but did not name them. On the Air India privatisation, Capa India head Kapil Kaul said bids are likely to be out middle of next month and the process may be over by July.

It can be noted that the Tatas, which run two airline joint ventures, the full-service Vistara with Singapore Airlines, the low-cost AirAsia India with the eponymous Malaysian carrier, have said they would bid for the troubled flag carrier, while the largest carrier by market share Indigo also said it could be a suitor.

Last June the government had decided to exit fully or partially the national carrier, which is sitting on almost Rs 60,000 crore debt and has an annual interest outgo of around Rs 6,000 crore.

On the domestic airline sector, Singh, who is credited for reviving the almost crippled SpiceJet two years ago, said that the industry as a whole needs to rationalise deployment to ensure profitability of each airline and expressed hope that the severe congestion at the Mumbai airport will sort of help the airlines rationalise their aircraft deployment.

On the reported talks about aviation fuel coming under the GST, he said such a move will, in fact, be a financial boom for the states as the combined VAT they collect on ATF is only Rs 3,000 crore annually.

And lower fuel charges will lead to higher air traffic operations in all the states, which will spawn more revenue streams for the states, he said.

On the RCS or the Udan scheme, wherein SpiceJet was one of the pioneers to begin operations, he said he gets better yields on these routes than the traditionally busy metro sectors.

"From day one we have been clocking over 90 percent seat factor (PLF) in all these routes. So, I am extremely, happy about the Udan operations and will be expanding into more routes," Singh said.

"There are plenty of airfields like Jalandhar, Jaisalmar, Hubli, Kanpur etc which are fully empty and we will fly into those airports," he said, adding when they had bid for the RCS routes, many told him that he was making a mistake. "But am happy that we did not listen to them."