In recent months the government hinted its willingness to exit Air India completely, earlier it was planned to retain a 24 %. Air India is more attractive proposition this time around, debts are significantly reduced. A 100 percent stake sale gives the buyer total control.
The Tata Group is the only and sole contender in the rumble to buy for Air India from the government.
Tata’s have hooked the law firms to get a insight for the potential deal, and are evaluating the option with an open mind for possibilities. The government is not keen on extending the August 31 bidding deadline yet again. Fallout of covid-19 pandemic already resulted the same till now thrice.
Interestingly, Tatas’ joint venture (JV) partner in Vistara –Singapore Airlines– has, for now, declined to join the Tata bid. The decision has been communicated by Singapore Airlines. This is indeed a twist in the Tata group’s ambition to bring Air India back home. Tata Sons Chairman N Chandrasekaran has in the past, and on record, stated that the group “will not run a third airline unless we merge”.
Before the pandemic, Tatas were looking to merge its other airlines, Air Asia with Air India Express. It could not be ascertained if that is still the game plan. The group has a 51% stake in a JV with Malaysia’s low-cost carrier AirAsia.
It will be quite interesting to see how things play, and come in a full circle. As Air India was founded by J.R.D Tata as Tata Airlines in 1932 and was then forced to relinquish control in 1953, when government nationalized Air India. If Tata Group acquires Air India, it will also augment Vistara’s domestic market share, which presently stands at 6%.
