Tata Sons Can Buy Air India & Merge It With AirAsia To Challenge IndiGo, SpiceJet; Will Air India ‘Return’ To Tata?

Air India has been fighting multiple issues in order to maintain operations since last year. There have been discussions about States of the state-run carrier Air India being sold off by the government. 

And now the news is that the TATA Group is planning to take over Air India by bidding for it under the Government’s plans of disinvestment.

Find out all the details right here!

Tata Group To Take Over Air India; Initiated Due Diligence Already

As revealed by new developments, the TATA Group has already initiated due diligence on Air India and will be formally bidding close to the deadline announced officially which is at the end of this month. 

A spokesperson of the Tata group confirmed the news, saying, “Tata Sons is currently evaluating the proposal and will consider a bid after due consideration and at the appropriate time. There is no plan to bring in a financial partner.”

The airline was actually formed as a division of Tata Sons Ltd. in 1932 and was operated as Tata airlines until 1946. After 1946, the airline became a public limited company and it was renamed to Air India.

In 2018, after facing heavy losses, the government decided to put up 76% off Air India for sale. However, this sale failed to bring in success which led to the government abandoning the sale of the airline altogether. 

Reattempting the sale of Air India, the Finance Minister Nirmala Sitharaman announced an ambitious plan of selling off Air India to private players by March 2020. 

In light of the outbreak of the coronavirus pandemic, which obstructed the economic activities across the globe, the Centre announced an extension of the deadline to submit an expression of interest (EoI). In June, the Centre announced that the deadline would be August 31, when Tata Group would be making the bid.

TATA Group Looking To Merge AirAsia India And Air India

Air India is available for sale as one big company including the Air India express which is a low cost subsidiary of the airline and the real estate assets. There are some other interested buyers who want the Air India express to be sold separately which will help them bid for the low cost carrier.  

As per reports, Tata sons holds 51% stake in AirAsia India and is planning to merge the two companies after buying out joint venture partner Tony Fernandes. 

As of March 31 2019, Air India has a total debt of Rs. 60,074 crores, the TATA Group would be required to absorb Rs. 23,286.5 crores. Apparently, the remaining amount would be transferred to Air India Assets Holding Ltd (AIAHL), a special purpose vehicle.