Air India privatisation: Tatas better candidate to bid for it, says Mittal

A few weeks ago, group chairman N Chandrasekaran is reported to have had an informal meeting with union finance minister Arun Jaitley and civil aviation minister Ashok Gajapathi Raju in New Delhi, triggering speculation about India’s largest conglomerate renewing interest in a possible deal to buy Air India. Tata Group itself, despite the debt pile worry, sees value in the 14% market share the airline commands in the domestic market.

JRD Tata had started Tata Airlines in 1932, which was later in 1946 renamed as Air India and was subsequently nationalised in 1953.

The Tata Group in partnership with Singapore Airlines is reportedly considering buying India’s national carrier Air India from the government, news channel ET Now reported. The Tatas are the original promoters of Air India. Once the cabinet gives its approval, specifics related to how much stake should be sold and how, will be decided.

Air India now holds only a 14 percent market share in the nation’s domestic air traffic, leading to Finance Minister Arun Jaitley stating that “If 86 percent of flying can be handled by the private sector, so it can also handle 100 percent”. So, the Tata Group’s passion in aviation has always been there.

While Air India has a 105-strong fleet strength and deep worldwide networks, it comes with aircraft-related debt of ₹20,000 crore and another ₹32,000 crore of working capital debt.

As Air India’s privatisation gathers momentum, the national carrier’s history may just come a full circle. Can it change Indian aviation industry?

The Tatas run two joint venture airlines – AirAsia India and Vistara – both of which are relatively small operations compared to Air India. The joint-venture airline will start plying global routes next year. Nearly a decade later, Ratan Tata was named the chairman of Air India.

Air India, which is surviving on a Rs 30,000-crore bailout package spread over 10 years announced by the Manmohan Singh government in 2012, is working on ways to improve its financial position.

Another domestic airline company Vistara was also founded in 2013 between Tata Sons and Singapore Airlines. “The government may retain a minority stake in Air India”.

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