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

Sources add that Tata Group may try to rope in its existing joint venture partner Singapore Airlines to buy the balance 49%, that is if the Modi government decides to completely privatise Air India. "Its airline operating competency will be a significant asset to the consortium and will be critical in ensuring the success of Air India in the global market place".

In 2000, the Tata group and Singapore Airlines had expressed their interest in acquiring up to 40% of Air India.

Despite all the woes ailing Air India, there are clear benefits for a serious aviation business operator. The Narendra Modi government has reportedly approached the Tata Group to buy the national carrier which is now struggling to hold up financially.

Air India's original avatar was as Tata Airline which was launched in 1932 by Tata Group patriarch JRD Tata.

Air India was initially owned by Tata Group, before it was nationalised in 1953.

For the Tata Group, it will be about turning the wheels of history full circle if the Air India deal materialises. While Air India's brand and service positioning is quite different than Air Asia, it might be in direct competition to Vistara on certain routes and sectors, although Vistara's fleet of 14 aircraft is no match to Air India's 118 aeroplanes. The group's keen interest in an otherwise tough Indian aviation market is no secret, owing to which, Tata has built up positions and active business interests in two major domestic carriers.

Then, in 2013, the then Tata Sons chairman Ratan Tata had said he would look at Air India if its put up for disinvestment. He held the post for three years, from 1986 to 1989.

The Union cabinet is expected to meet on Thursday but it is unclear if the national airline's privatisation plan will be part of the agenda.

The airline is now running on a ₹30,000-crore bailout package extended by the UPA government in 2012. In fact Air India's disinvestment plan is a major move taken by the Modi government to free itself from very large debts.

As per a report in the Times of India, Tata group chairman N Chandrasekaran recently had a meeting with Finance Minister Arun Jaitley and Civil Aviation Minister Ashok Gajapathi Raju. "The government may retain a minority stake in Air India".

  • Zachary Reyes