Is GoAir talking to Lufthansa, Emirates, Qatar for stake sale?

The Indian aviation is witnessing a flurry of action after the deal between Jet Airways and Abu Dhabi’s Etihad Airways.

Close on the heels of Qatar Airways disclosing that it is in talks with IndiGo for a code share agreement, now GoAir has appointed a JP Morgan to scout for foreign partners.

According to a report in the Economic Times, the company is in talks with three-four airlines and, interestingly, one among them is Qatar Airways.

[caption id=“attachment_766333” align=“alignleft” width=“380”] In January, GoAir Chief Executive Officer Giorgio De Roni had said that the airline is not interested in selling stake to overseas only for funds. Reuters[/caption]

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GoAir’s plan is to sell up to 49 percent stake and other companies it is in talks are Lufthansa and Dubai-based Emirates, said the report.

The company has not offered any comments but a spokesperson has said, “It is too early to divulge more details.”

With the Gulf carriers gaining more prominence in the Indian skies, European airlines are witnessing a fall in their market share here, the report quotes the managing director of a foreign airline as saying.

“So, European carriers need to counter this by partnering with Indian carriers to connect more cities and towns,” the MD has been quoted as saying.

Last month Lufthansa had, according to the report, denied it is interested in picking up stake in GoAir, but is keen on Asian low-cost carriers as partners.

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In January, GoAir Chief Executive Officer Giorgio De Roni had said that the airline is not interested in selling stake to overseas only for funds.

“We would choose a partner evaluating them in terms of best practices and their ability to improve our technicals,” he was quoted as saying in a report in the Hindu Business Line.

“…Our approach is to grow cautiously… we are running a marathon and not a sprint,” he had said.

However, a global partnership is the need of the hour for most of Indian airlines because of the increasing competition and other difficulties they face in the domestic sector.

According to KPMG’s Amber Dubey quoted in the ET report, to over come these difficulties domestic carriers will have to have an equity alliance or code sharing pact with global carriers.

And in such a scenario, the evolving business model is that of a hub and spoke, where Indian carriers will feed passengers to the global majors’ hub.