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Emirates not interested in Air India stake

Statement follows decision by Indian government to allow foreign investors to own up to 49% stake in carrier

Gulf News

Dubai: Emirates airline confirmed it does not intend to buy stakes in any airline, following a decision by the Indian government to allow foreign investors to own up to a 49 per cent stake in Air India.

“Emirates has no plans to buy or acquire any airline. We continue to focus on our organic growth, and will partner with other airlines where it benefits our customers and makes commercial sense,” an Emirates spokesperson told Gulf News on Thursday.

The statement is a reiteration of comments made repeatedly by Tim Clark, president of Emirates airline, who earlier stated that “equity [stakes are] not on the table.”

On Wednesday, India cleared a proposal that would pave the way for global airlines to bid for the state-run carrier. This brings Air India in line with the country’s other local airlines, in which foreign investment is allowed.

Experts said that Gulf carriers are unlikely to bid for stakes in Air India just yet, as they may have concerns regarding the Indian aviation market, which remains highly protected.

John Strickland, aviation expert and director of JLS Consulting, said the decision by Delhi was positive news for India’s aviation market as foreign investment could lead to efficiency improvements in Air India, which has performed poorly in terms of financials.

“It could also lead to sharing of additional expertise from non-Indian airline groups. Gulf carriers are certainly likely to be interested, but there may be some resistance as there are concerns within India about the amount of traffic which they account for,” he said.

Strickland added, “There could be alarm from other home airlines about the risks of a stronger Air India becoming overly dominant.”

Abu Dhabi-based Etihad Airways, which already has a 24 per cent stake in India's Jet Airways, has not commented on the latest decision from the Indian government.

However, the carrier, whose previous chief executive led it to a loss-making strategy of investing in foreign carriers, is currently doing a U-turn on that strategy.

During the Dubai Air Show in November, Peter Baumgartner, Etihad Airways’ top executive, told Gulf News that the carrier will not continue to invest in various airlines across the globe.

“No, we certainly are not on the lookout for [airline stakes] for the next investment opportunity,” he said at the time.

The move to allow foreign companies to invest in loss-making Air India comes after Indian Prime Minister Narendra Modi’s cabinet gave the go-ahead last year to sell the carrier. This followed attempts by the government to keep Air India going, having spent billions of dollars to do so. The carrier has a debt of $8.5 billion.

But though UAE’s largest carriers may not be interested in a bid, other carriers elsewhere are examining that option. Indian carrier IndiGo, Tata Group, and Turkey’s Celebi Aviation Holdings have expressed an interest in buying some of Air India’s businesses.

 - With additional inputs from Reuters

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