IndiGo, SpiceJet largest buyers of electoral bonds in aviation sector

The recent disclosure by the Election Commission of India sheds light on the involvement of two listed airlines in the country, IndiGo and SpiceJet, in purchasing electoral bonds. The aviation companies together bought bonds worth Rs Rs 56 crore between 2019 and 2023 and did not shy away from buying the bonds even during the COVID pandemic.

IndiGo, through its parent company InterGlobe Aviation and related entities – InterGlobe Air Transport and InterGlobe Real Estate Ventures – purchased bonds totalling Rs 36 crore, with transactions noted in May 2019 and October 2023. Additionally, Rahul Bhatia, a promoter for IndiGo, bought bonds worth Rs 20 crore in April 2021, when the pandemic severely affected the aviation sector. SpiceJet also participated in the electoral bond scheme, making three separate purchases totalling Rs 65 lakh between January and July 2021. ABC Ltd, a little-known Kolkata-based logistics company, which has an IATA license, bought electoral bonds worth Rs 40 lakh.

IndiGo’s unquestioned monopoly

IndiGo has a near monopoly in the airline sector, with a market share of about 65 percent. The domestic airline industry is one of the few sectors in India where a single player owns over half the market share. Still, it has yet to come under the radar of the Competition Commission of India or the regulator, the Directorate General of Civil Aviation (DGCA), for its dominant position.

SpiceJet is facing several legal cases in India and abroad and is involved in a legal dispute with the former promoter Kalanithi Maran over the enforcement of a 2018 arbitral award which directed the airline to pay Rs 579 crore plus interest to Maran and KAL airlines. The airline recently submitted to the courts that any more payouts would force the airline into bankruptcy.

Bankrupt yet bidding for GoAir

According to several reports, the airline also let go of hundreds of employees, claiming that it is restructuring its operations. However, it has not prevented the SpiceJet chairman and Managing Director Ajay Singh, and another entity, Busy Bee Aviation Private Limited, from bidding for the bankrupt airline, GoAir. The majority shareholder of Busy Been Aviation is Nishant Pitti, a co-founder of the online travel platform EaseMyTrip. Pitti owns a 51 per cent stake in Busy Bee Aviation Limited, and the rest is with local investors.

EaseMyTrip was recently in the news after its CEO Pitti defended the company's decision to suspend all flight bookings to the Maldives after its President Mohamed Muizzu sought the removal of the Indian military from the island nation by March 15.

Among the beneficiaries of the electoral bonds, the BJP has emerged as the primary beneficiary of this scheme, with a significant proportion of the funds directed towards it compared to other political parties. This has sparked discussions on the impact of electoral bonds on political transparency and funding.