Tata Group eyeing stake in Air India, says chairman Chandrasekaran
10 Oct 2017
Tata Group is interested in buying a stake in the national carrier Air India, which the government has put on the block, and is awaiting details of government's divestment plan, Tata Sons executive chairman Natarajan Chandrasekaran has said in an interview with CNBC TV 18.
This is the first formal statement by Tata Group on Air India since the government announced its decision to sell the airline earlier this year.
Tata Sons already has stakes in joint ventures with Malaysian Carrier Air Asia and Singapore Airlines in India and is looking at expanding its presence in civil aviation.
The group, however, needs more details from the government on the process, Chandrasekaran told CNBC-TV18 in an interview, which was released on Monday evening.
''We will definitely look at it,'' Chandrasekaran said, adding, ''We still don't have all the details. Every business proposal will be very seriously looked at and we will look at that (Air India). Definitely. But, currently we don't have the data... there are so many different groups within Air India and then there is real estate, there is debt, there is liabilities and we got to look at all of that it but we will definitely look at it.''
He said the government has not yet clarified on the sale process and what it might do with the airline`s Rs50,000 ($8.5 billion) debt burden.
"We still don`t have all the details," Chandrasekaran said. "We have two airlines, both are subscale. I feel scale is important."
''We have a team which can definitely spend the time as soon as the details are out,'' he said, adding, ''We need to look at aviation as a whole. We are subscale. We got two airlines both are subscale. Any decision that we take - Air India or otherwise - we have to have a story because we can't be operating with 15 aircraft or 20 aircraft. I feel scale is important, in every industry in every group we operate in scale is important. Without scale you get to a situation where you are all over the place and it is very, very difficult to pay management attention."
Tatas have launched Vistara in alliance with Singapore Airlines and AirAsia India. Vistara has said it will acquire wide body aircraft soon to fly international.
The Tata chief said Air India would be a ''strategic decision'' and therefore ''data'' and ''long-term story is required''.
He also indicated Tatas have looped in Singapore Airlines to potentially look at Air India jointly as they had in the past but failed then.
''Do you think I would not have?'' he asked, in reply to a question on talks with Singapore Airlines, but declined to comment further.
Prime Minister Narendra Modi`s cabinet in June gave the go-ahead to sell Air India, which has received $3.6 billion since 2012 in state aid.
Last month the government invited bids to appoint financial and legal advisors for the sale process.
Some companies including low-cost Indian carrier IndiGo, owned by InterGlobe Aviation, ground handling company Bird Group and Turkey`s Celebi Aviation Holdings have expressed an interest in buying some of Air India`s various businesses.
Air India, founded in 1930s by the Tata Group, before being nationalised in 1953 through a majaority stake acquisition, is saddled with debts and a bloated cost structure.
Once the nation's largest carrier, its market share in the booming domestic market has slumped to 13 per cent as private carriers expanded.