Air India attracts bidders

Eleanor Steed
By Eleanor Steed July 11, 2017 09:08

Air India attracts bidders

As TATA puts its bid in to take on Air India one wonders if TAT (which effectively ran the national airline before the days of Air India) could survive the punishing schedule of change that needs to take place within the national carrier. A schedule that is likley to cause a great swathe of brand damage in the immediate to mid-term as the workforce is dramatically slashed; not to mention the debts that Air India runs-up by the day. One question to think about is whether SIA will benefit in any way from an Indian national carrier owned and run by TATA? It would be better positioned than most. The other thought in all this is the impact on other Indian airlines. The complete cessation of government-backed flights being run at a loss should give a huge boost to the Indian airline sector that will filter through immediately to all airlines. The Indian domestic market is strengthening.

Meanwhile, Indian multi-millionaire Surinder Arora, a major landowner around Heathrow, has put in a bid to the UK government to build and run Heathrow Runway 3 and the Terminal 6 that goes with it.  The bid is backed by Bechtel and it is stated that the bid will save the UK government £6.7bn. This is of great interest and a gamechanger but it begs the question: Why should a new runway and terminal automatically be built and run by BAA? This bid not only saves the UK government money but it saves Heathrow’s airline customers the burden of increased runway costs to pay for the expansion – great news for British Airways/IAG, Virgin Atlantic and all other airlines.

On the leasing front, when will HNA decide to sort out its debt ratios and if it doesn’t, how will a correction impact the extensive holdings it has in many aircraft lessors. One also wonders just how long some top-flight lessors will be able to continue collapsing lease rates to silly levels? Maybe we are coming towards the end of the worrying trend and that means great news for all. We shall see.

Eleanor Steed
By Eleanor Steed July 11, 2017 09:08