Paramount to buy 40 jets for $2 billion

Paramount Airways plans to acquire 40 new Embraer aircraft for $2 billion and says it is in discussions for a possible acquisition of an existing airline, reports Gaurav Choudhury.

Paramount Airways plans to acquire 40 new Embraer aircraft for $2 billion and said it was in discussions for a possible acquisition of an existing airline.

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Paramount Airways, which operates only in south India, said it would acquire an existing airline if it received the right valuation and synergies, its managing director M Thiagarjan told reporters.

“An acquisition would hasten the process of consolidation. We are keen to acquire another airline and would be looking at a buyout and only the Paramount brand will remain,” Thiagarajan said.

Markets are abuzz with reports that Paramount Airways is in discussions to acquire Go Air, run by the Wadia Group. Thiagarajan did not divulge the name of the airline he is in talks with. “I will not say who we are talking to. I do not want to comment on media speculation as I do not want to conduct the negotiation through the media,” he said.

He said a possible buyout in the western region would have to be consummated in the next 15 months. “Otherwise, we have our own plans firmed up for the region,” he said.

Go Air Managing Director Jeh Wadia has rubbished reports of a takeover, but said the airline planned to divest of equity through a private placement.

Paramount Airways, which started operations in 2005, operates twin-class-- business and first—short-haul aircraft connecting several cities in south India. Thiagarajan, who met visiting Brazilian President Luiz Inacio Lula Da Silva, said his airline made profits but did not give out figures. The airline’s current yield is around Rs 4,000 per seat, much higher than many of its peers.