Singapore Airlines has open mind on making initial bid for Air India

Singapore Airlines has an open mind about making an initial bid for a stake in state-run Air India, the head of the Singaporean carrier's India business told Reuters on Thursday.

India said last week it would invite initial bids this month for a stake in the flag carrier. The cabinet approved the sale last year after successive governments poured billions of dollars into the indebted airline.

"India is a strategic market for Singapore Airlines. We have an open mind," David Lim, general manager for India, said in an interview when asked whether Singapore Airlines would bid.

He did not elaborate.

Several companies have expressed an interest in buying some of Air India's businesses, including low-cost Indian carrier IndiGo, owned by InterGlobe Aviation, Tata Group and Turkey's Celebi Aviation Holdings.

India cleared a proposal in January to allow foreign investors to own up to 49 percent of Air India, opening the way for global airlines to bid.

Lim said Singapore Airlines had already shown its commitment to the Indian market by setting up Vistara, a full-service domestic carrier it jointly owns with India's Tata Group.

He did not say whether Singapore Airlines would look at bidding for a stake in Air India alone or with Tata.

Singapore Airlines operates 98 flights a week to India and plans to increase that to 104 by summer. Its low-cost airline, Scoot operates 46 flights to India, while Vistara is expected to launch its first international flights this year.

Air India has six subsidiaries - three of which are loss-making - with assets worth about $4.6 billion. It has an estimated $1.24 billion worth of real estate, including hotels.

The carrier's debt has ballooned to $8.5 billion and India plans to transfer part of this into a separate unit before selling a stake in the carrier.

The government has injected $3.6 billion since 2012 to bail out Air India which was founded in the 1930s and is known to generations of Indians for its Maharajah mascot.