Tata Sons Hire Experts To Acquire Air India Before 2021-End; Seeks Protection From ‘Unexpected Claims’

The national carrier of India, Air India, might be on its way back home. The Tata’s had started the company way back in 1930. The company was nationalized in 1953. Almost after a decade, the company might be on its way back home.

Experts called in to carry out due diligence

Tatas are very much interested in bringing back the legacy airline under its fold. But that will have to go through the standard operating procedure just like any other investment. Due diligence is a process of research and analysis that is carried out before an acquisition, investment, business partnership, or bank loan, to determine the value of the intended subject. It also is carried out to identify if there are any issues involved.

So, to carry out the same procedure, Tata Sons have roped in the consulting firm called Bain and Company. They have also onboarded the Seabury group for the same purpose. The process has been delayed because of the second wave of the covid-19 pandemic and several travel restrictions which ensued.

 Also, to make a blueprint of integration of Air India along with existing airline businesses, the Mumbai-based conglomerate has hired, experts in the aviation business from Delta and United Airlines.

According to sources, several teams have been formed which are scrutinizing the threadbare of ailing Air India business. They are examining Air India’s fleet strength, route economics, engine equipment and procurement deals of aircraft, etc.

Taking steps with caution

Air Indian, for now, is a government-owned entity, is susceptible to various claims. It was recently in the news because of claims filed by Devas Multinational and Cairn Energy to seize overseas Air India assets to cover its dues. Tata is very cautious about any such future events, and hence there are considering seeking an indemnity clause to minimize liability against unforeseen attempts.

Tatas already own 51.49% of Vistara and the rest is owned by Singapore Airlines. The group has an 83.67% stake in Air Asia as well.

Singapore Airlines have shown a big heart and has abandoned the non-compete clause. This has allowed Tata to go ahead with its efforts to save Air India.