Tatas currently have two aviation joint ventures, Vistara and Air Asia India, but now plan to expand scale of operations by taking over Air India
Tata Sons’ chairman Natarajan Chandrasekaran, on Tuesday, confirmed that the Mumbai-based group is considering buying state-run Air India Ltd.
Chandrasekaran, however, also said that they need more information from the government on the process.
In an interview to CNBC-TV18, Chandrashekhar said: “Every business proposal will be very seriously looked at and we will look at that. 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.”
Tatas currently have two aviation joint ventures in India – Vistara and Air Asia India. The acquisition of Air India, or a majority stake in the national carrier, will help the company expand the scale of its operations in the Indian aviation sector.
“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,” Chandrasekaran said.
He also indicated that Tatas had asked Singapore Airlines to potentially look at Air India takeover jointly.
This is Tata group’s first formal statement on Air India and it comes three months after many media organisations reported that the group had sought details of the Air India disinvestment in meetings with government officials.
The government has announced strategic disinvestment of the loss-making and debt-ridden national carrier by early 2018. The airlines, which is under stiff competition from the more efficient and often-cheaper private airlines, is reeling under a debt of about Rs 50,000 crore.
Notably, the airline was launched as Tata Airline back in the year 1932 by Tata Group’s founding chairman JRD Tata.