Emirates is not interested in Air India but is excited about its code share with SpiceJet
- No talks as of now to bid for Air India, India & Nepal Vice President Esa Sulaiman Ahmad told Business Insider.
- The United Arab Emirates (UAE) airline executive said the company is focussed on organic growth in India.
- Emirates' code-share agreement with SpiceJet may roll-out by Diwali, which is in end-October.
Amidst hectic parleys in the corridors of power, Emirates, owned by the government in the United Arab Emirates (UAE), has ruled out the possibility of a bid for Air India. "We are not looking at it. We are more focussed on seeing how we can grow better organically," Essa Sulaiman Ahmad, the Vice President of India and Nepal, said in a conversation with Business Insider.
There are heated debates underway in many forums on whether Air India should be fully privatised. Should the buyer for the national carrier should be Indian or foreign? A few sections of the Bharatiya Janata Party (BJP) government seem keen to find the best possible price for the ailing Air India, but the BJP's ideological parent, the Rashtriya Swayamsevak Sangh (RSS), has a clear stand against selling the airline to a foreign peer.
Subramanian Swamy's latest tweet on the proposed privatisation of Air India
The Civil Aviation Minister Hardip Puri has been misled by foreign consultancy firms and corrupt bureaucrats on pri… https://t.co/2ApcCIxWKy— Subramanian Swamy (@Swamy39) 1567087085000
Cashing out of Air India is important for the Narendra Modi government looking to garner enough money to invest in more productive ventures that may speed up the economic growth, which recently hit a six-year low of 5% between April and June 2019.
The fact that the debt-ridden airline-- ₹55 000 crore at last count-- may reportedly clock a profit, for the first time in a decade, may have helped the sale after many failed attempts in the past. However, the sale of Air India has been a political and an emotional issue, which the Emirates has steered clear of.
Emirates code-share agreement with SpiceJet
Meanwhile, Ahamad is excited about the code share agreement with SpiceJet, a budget airline based in India. "We will gain six new destinations in India," he said adding that the process is in its final stages. "The two tech platforms have to talk to each other and that is taking a little time," he said. The roll-out is likely by Diwali (late October) this year.
The two airlines reached an agreement in April this year to ride on each other's strengths. With a 15% market share, Emirates is already the biggest player in international flights flying to and from India and now, it wants more. SpiceJet is a popular carrier especially in the southern part of India which has frequent fliers to the Gulf countries.
Emirates' expansion in India will depend on the review of bilateral agreement between India and UAE
The entry of Singapore Air-backed Vistara into international routes, particularly in the Middle East, is a challenge to the likes of Emirates.
However, there is a likelihood of expansion for Emirates in India if the two countries decide to revisit the bilateral agreements. "The last one was signed in 2014. There is no specific timeline for a review," he said.
The grounding of Jet Airways has been a shot in the arm for airlines in tightly fought market like India. The average number of annual passengers in India is expected to treble to 520 million by 2037, and at that point, it would be the third largest aviation market in the world. Emirates wants a chunkier slice of that pie.
Air India will remain with an Indian company even after sale, says Minister