Tata Group is poised to enter Air India cockpit after its 1953 exit
Bengaluru, NFAPost: Adding to its aviation ambition along with AirAsia and Vistara, Tata Group will file an expression of interest (EoI) for Air India on Monday, states various sources.
The Narendra Modi government has been trying to divest 100% stake in Air India and budget carrier AI Express, and sell its 50% share in Air India SATS Airport Services, a joint venture with Singapore-based ground handling firm SATS.
If Tatas succeed in bidding for Air India, the government would have found a potential suitor for Air India after making unsuccessful attempts for the two years.
Tata Group is already struggling with its investment by Tata Sons Ltd in AirAsia India and Vistara during the pandemic period. In both these companies, Tata Sons Ltd owns a 51% stake in each.
If the group decides to buy Air India it will be a moment of history is completing the full circle as the group will be regaining the ownership after 67 years. Ratan Tata’s predecessor, the legendary industrialist and philanthropist J.R.D. Tata, was India’s first licensed pilot and started Tata Airlines in 1932 as the nation’s first carrier, flying mail between Karachi in then-undivided, British-ruled India and Bombay.
Tata Airlines was later nationalised and morphed into Air India around the time of India’s independence. According to industry sources, already Narendra Modi led government has invited Tata Group to bid for the project with various concessions.
A group of 209 employees of Air India, led by Air India Commercial Director Meenakshi Malik, are making preparations to bid for Air India in partnership with a private financier. The airliner will urge its employees to contribute Rs 1 lakh each towards the bid.
Aviation was always a dream for Tata Group as the company evinced its interest when India began to allow private airlines in the early 1990. The company decided to join hands with Singapore airlines for this journey but the government did not give permission. Even their efforts in 200 to by Air India along with Singapore Air also failed.
Tata Group, sources said, is seeking to persuade its partner Singapore Airlines to waive off a non-compete clause in the agreement to bid for Air India and also partner with the conglomerate in its bid.
The development comes amid the Covid pandemic which has adversely hit the aviation sector. Besides cost escalation, companies are facing a drastic reduction in passengers. The journey of Tata-owned Vistara and AirAsia India is not different as they have never made money. According to the CAPA Centre for Aviation estimates, both airlines have lost around $845 million combined through March this year.
The aviation sector has reported net losses of about Rs 21,000 crore during fiscal 2021 due to travel restrictions. It would need additional funding worth Rs 37,000 crores over FY2021-23 to recover from losses and debt, credit rating agency Icra Limited had said in a recent report.
