By Prince Mathews Thomas – Moneycontrol.com
Mark Martin is not surprised that international airlines like Air France-KLM and Delta Air Lines are interested in Air India. But, he thinks the government is not doing enough to market the national airline. “It is underselling it…Air India is not something you sell like a ship breaking unit,” Martin told Moneycontrol in an interview.
“There will always be great international interest in Air India,” says the Founder and CEO of Martin Consulting LLC, an aviation advisory and consulting firm.
Q. There are reports that Jet Airways, Air-France and Delta may join hands to bid for Air India. Do you see more interest in Air India in the coming days?
A. There has always been great international interest in Air India. There will be more.
We should understand that Air India has been a trendsetter. Emirates (the Dubai-based airline) took 22 years to reach where it is today. Air India was Asia’s number one within 15 years of its launch.
Q. What makes Air India so attractive?
A. Air India has a true global network. And the widest network in some of the regions.
It is sitting on bilaterals (air service agreement between two countries that enable services) that others will openly take it.
Nearly all routes can be made profitable. The focus actually should be on converting their bilaterals. Air India is a national carrier and that shows how many countries it can fly to.
Air India sits on world’s most lucrative access rights. It can fly to Latin America tomorrow morning if it wants to. Also, because of its base in India, costs are 30 per cent lower than global peers.
Q. What needs to be done to convert those bilaterals?
A. Air India hasn’t made the maximum use of its bilaterals. You would need a fleet of 300-400 aircraft and financial capability to do that. (Air India at present has a fleet of 118 aircraft. Its units Air India Express and Air Alliance have another 38)
Q. The airline also has some valuable real estate.
A. Yes, Air India has some of the wealthiest real estate in some of the poshest addresses of the world. From its office near Champs-Élysées in Paris, to the one in New York. Or the office in London’s Bond Street. In fact, the Indian embassy in London is based in Air India’s property. And in Japan, the airline’s office covers three floors in a building that is in one of the costliest business districts in the world.
Then there is also the airline’s art collection. There are artworks by Salvador Dali (a leading proponent of Surrealism) that sit in Air India’s Mumbai office.
Q. The Government may issue the expression of interest for Air India sale within two weeks. How has it handled the disinvestment till now?
A. The Government is yet to come clear on Air India’s liabilities. And at the same time, it wants to break up the company and do a garage sale of its valuable assets. The Government is underselling Air India.
Air India is not something that you sell like a ship breaking unit, you can’t break it up and sell valuable units.