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Bravia Capital in talks to invest in Indian airline SpiceJet

2 Nov 2012

Hong Kong-based private equity Bravia Capital is amongst a number of private equity firms in talks to acquire Indian airline SpiceJet, the company’s chief executive Neil Mills told the Wall Street Journal.

The news follows reports earlier this year that private equity firms including Blackstone, Bain Capital and KKR were believed to be considering bids for the low-cost operator. In addition, private equity firm WL Ross previously held a stake in the airline.

According to a recent white paper from Bravia, domestic passenger traffic in India continues to grow at an impressive rate and crossed the 60.7 million mark at the end of 2011. Domestic passenger growth year on- year was 17.2 per cent, in-line with the year-to-year increase expected from a rapidly growing emerging economy with a relatively small passenger base. This is estimated to increase by roughly 15 per cent per year out up to 2020 and would put domestic air travel at over 210 million domestic passengers per year by 2020.

Despite this, however, the Indian carriers have failed to translate the demand for air travel into profits. For the year ended March 2012, five out of the six major airlines in India were loss making, highlighting the opportunity for investment in the sector.

The Indian government recently passed legislation enabling overseas investors to own up to 49 per cent of the country’s airlines.

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