capa-india, Author at Aviation consulting, research, data | India | CAPA India

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Expedia Group, the world’s largest online travel company, in association with CAPA India, the region’s leading aviation advisory, research and knowledge practice developed ‘The inflection point for India outbound travel’ report, to enable global travel and tourism operators to better understand the Indian outbound leisure market. The report throws light on Indian consumers’ leisure travel habits and this year’s findings suggest that there is huge potential in this segment as India contributes to only 4.8 million leisure outbound trips. Key excerpts are provided below, however please click here to request a complimentary copy of full report.


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In October 2017, CAPA released a strategic noting presenting our assessment of the key success factors for the proposed privatisation of Air India [see bottom of this page]. This was based on our understanding of the national carrier and the market in which it operates. Despite the best efforts of the Government of India to balance the interests of all stakeholders, the divestment process for Air India failed to attract a single expression of interest from prospective bidders.


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A strategic investment in Air India would have provided the successful bidder with a critical presence in what is forecast to be the world’s fastest growing aviation market for the next couple of decades. The carrier also possesses a significant pool of skilled resources, valuable slots, bilateral entitlements, a well-established brand, and an ideal geographic location for developing an intercontinental hub.


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In recent days, both IndiGo and Jet Airways have issued statements advising that they will not be participating in the tender process for the divestment of Air India, pointing to unfavourable terms and conditions in the Expression of Interest (EOI) document. Furthermore, there has been media coverage that TATA/SIA are reportedly losing interest, leading to questions about the prospects for the entire transaction. However, TATA/SIA's position remains pure speculation in the absence of an official statement from the group.


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Clean-up the balance sheet: This is the most important first step. The airline can never be viable in its current avatar due to its massive debt and interest burden. The core divestment should consist of the airline operations only, namely Air India, Air India Express and optionally Air India Regional. They should be sold along with aircraft-related debt and reasonable working capital loans.