Tata Sons emerges as the top bidder for Air India after losing it for 68 years. The Centre is yet to take a final decision on the bid. This has raised hopes for a take-off of the salt-to-software giant’s civil aviation ambitions. Meanwhile, multiple sources say that the Tata Group’s offer is higher than that made by SpiceJet promoter Ajay Singh. Ajay Singh had bid in his individual capacity.
According to sources, the bids need to be vetted and approved by Home Minister Amit Shah-led panel and so the winner will be announced only after that.
Sources say that the Finance Ministry, the Civil Aviation Ministry and the Department of Investment and Public Asset Management (DIPAM) are working towards making an announcement by October 15. Meanwhile, A Tata Sons spokesperson has declined to comment on the matter.
Tata Sons have won the bidding process. Meanwhile, DIPAM clarified that Media reports indicating approval of financial bids by the Government of India in the AI disinvestment case are incorrect. Media will be informed of the Government’s decision as and when it is taken, they say.
As Air India was started by JRD Tata before it was taken over by the government, therefore, if the Tatas win the bid, the airline would have come a full circle.
Meanwhile, aviation industry watchers feel it won’t be easy even for the Tatas to turn around the debt-laden carrier. Tatas will need to put in thousands of crores in capital to clean up the balance-sheet. They need to pay the airline’s liabilities, fix many issues and then grow it to bring it to a point where it can be a meaningful global player, they say.
According to sources, Air India has good assets, infrastructure, slots, and bilateral agreements. If they win the bid, Tatas will get access to the top-notch MRO infrastructure of Air India and its real estate. The Tatas have many companies thus it looks like the Tatas are in the lead right now. Shoubhik Dasgupta, Counsel of Pioneer Legal, “prodigal airline returns to its original founders. This will be one of the biggest acquisitions in India.”
However, Dasgupta added that several questions remain. “How is the acquisition going to be financed? How will Tatas deal with the massive losses that Air India suffers on a daily basis? What about synergies with Vistara and Air Asia? Do their joint venture partners, Singapore Airlines and Air Asia Limited, have any say as customarily JV partners agree not to invest in a competing entity, which Air India would be.”
What is the Finance Ministry, the Civil Aviation Ministry and DIPAM is going to announce on October 15, we are yet to know.