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OUR AVIATION CORRESPONDENT 31 March ,
2005: As the Indian skies warm up for a dogfight, there is action on the ground too! India's state-owned aviation major Indian Airlines (IA) has announced its plan to go for an initial public offering (IPO) to raise funds. After a meeting of its board, a spokesman for the company told newsmen that the decision would be subject government clearance and regulatory approvals.
The earlier Union government's plans for strategic stake sales in Indian Airlines and Air-India never took off; so the incumbent government has lately been attempting to raise funds for its public sector airlines by diluting its stake in the capital market. Indian
There is no date or size fixed for the IIndian
Airlines IPO. The funds raised are expected to be used to enhance the debt-equity ratio and expand its fleet.
If all approvals come through, the Indian Airlines IPO will be the first instance of an Indian public sector carrier tapping the capital market.
Private airline Royal Airways, which is planning to launch low-cost airline SpiceJet, is already listed on the stock market. Leading private sector airline Jet Airways too entered the stock market recently. Apart from these two, low-budget airline Air Deccan is also planning to tap the capital market in 12-18 months.
Besides the domestic Indian Airlines, its international counterpart Air India is also preparing for its IPO in fiscal 2005-06.
Indian Airlines has posted a net profit of Rs 17.5 crore (Rs 175 million), after suffering losses for three consecutive years between 2000-01 and 2002-03. The Indian Airlines board also cleared plans to lease ten additional A-320 aircraft by September-October this year.
OUR AVIATION CORRESPONDENT
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