British Airways owner says Air India bidding a risk at this stage

International Airlines Group’s (IAG) bid for Air India is doubtful given its concerns over restructuring and government control of the national carrier.

IAG, which owns British Airways, has called its participation in the bidding process for Air India as a speculation. The group’s Chief Executive Officer William Walsh, had earlier denied interest in Air India in a post-result conference call in February. 

With reference to Air India, Walsh said it would be a risk that would not be justified at this stage. The remark was made a month before the release of the information memorandum for sale of the government’s 76 per cent stake in Air India. The Centre also plans to transfer management control of the airline to its new owners.

“We could probably look at it, but I have always dismissed the idea of Air India while government ownership is involved. What the government is saying now is a million miles away, and better than has been said in the past. But I do not think it would be enough to encourage us to look at it,” Walsh said. Air India requires massive restructuring, he added.

“There appears to be some appetite, but I would want to see some evidence of restructuring. So I think it would be a risk that would not be justified at this stage. So the answer is no,” Walsh said in response to an analyst query. 

On a query if it had changed position, the IAG spokesperson said, “We are unable to comment.” IAG is one of the world’s largest airline groups and the parent company of Aer Lingus (Ireland), British Airways, Iberia and Vueling (Spain). 

Qatar Airways IAG’s largest shareholder with 20 per cent stake.

Names of IAG, Lufthansa, Singapore Airlines and Etihad Airways have been doing the rounds as possible suitors for Air India, along with private equity firm Warburg Pincus and Singapore's sovereign wealth fund GIC.

Lufthansa, too, has called reports on its interest in Air India as market speculation, while Singapore Airlines has said it is keeping its options open with regard to investing in Air India.