Tata Sons may bid for Air India through joint venture Vistara or go solo: report
30 November 2020
Tata Sons is reported to be in talks with Singapore International Airlines (SIA) for a joint bid for Air India through Vistara, as the joint venture precludes a solo bid for the embattled national carrier, say reports .
Alternatively, Tata Sons is also reported to be looking at a solo bid once the non-compete clause iv the Vistara joint venture has been overcome. It all depends on the outcome of the talks as the acquisition of debt-laden Air India is a big gamble.
The Tata Group is reportedly in negotiations with Singapore Airlines to join it in a proposed bid for Air India through their joint venture Vistara, or to abandon a non-compete clause which prevents the Tatas to go it alone,
A bid by Vistara would, however, require approval from SIA and Temasek, which owns 55 per cent in SIA. Earlier, SIA and Temasek had reportedly flagged their concerns to Tata Sons about its proposed bid for the beleaguered national carrier.
It may be noted that the government has reaxed all conditions for sale of its stake in the debt-laden carrier, including foreign investment, after the airline failed to attract investors even after four aborted biddings.
While a successful bidding may help expand the market for SIA and the airline may be so disposed, reports say the Tata Group is all set to bid solo for the ailing national carrier if the partner does not agree to the plans. For the Tata group, Air India is an attractive proposition, considering its existing route network and global standing.
Reports say, Tata Sons would go ahead with the Air India bid irrespective of the outcome on the joint venture.
The Tata Group already operates two airlines — full-service carrier Vistara (with SIA) and Air Asia India (with Air Asia Berhad). Any acquisition of Air India will make it operator of three airlines, but at a time when airlines across the world are in a very bad shape financially.
The government is also believed to be of the view that the Tata Group acquiring and running Air India would be helpful for the economy following privatisation.
“Our group chairman has clearly stated that the airline businesses have to be consolidated and there cannot be multiple airlines. So Air India being a full-service carrier, it is only sensible that it will come under the Vistara business which is a full-service carrier too. So we are hopeful that our partner will be willing to participate in the future plans that include Air India,” reports cited a Tata Group director familiar with the matter as saying.
In August this year, the Tata Group, which founded Air India 88 years ago, had confirmed that it is assessing a bid for the struggling national airline and that it will take a final call after due consideration.