Tata Group may reportedly bid for Air India through Air Asia

• The Tata Group conglomerate is reportedly filing an Expression of Interest for the rescue of cash strapped Indian flag carrier Air India today.
• The report suggests that the Tatas have channelled its interest through AirAsia India, in which it holds a 51% stake.
• Air India’s privatisation plan is entering its final lap, and the deadline for submitting the EoIs (Expressions of Interest) is set for today (December 14).
• After submitting the EoIs, the bidders will be required to submit the physical bids within 15 days— i.e., by December 29.

The Tata Group conglomerate is reportedly filing an Expression of Interest for the rescue of cash strapped Indian flag carrier Air India today. According to ANI reports, Tata group will use Air Asia as a vehicle where Tata Sons have a significant majority stake.

The report suggests that the Tatas have channelled its interest through AirAsia India, in which it holds 51% stake after its Malaysian parent expressed inability to infuse fresh funds due to COVID-19 crisis.

Earlier Tata’s were eyeing to express their interest in Air India through its joint venture with Singapore Airlines, Vistara. However, Singapore Airlines reportedly was not keen in participating in the privatisation programme of the beleaguered airline Air India.

Last week, reports said that Air Asia is in talks with Tata Group to decide on the future of AirAsia India operations and Tata Group is interested in buying out Tony Fernandes’ stake in Air Asia. The sale of Air India, as the country’s national carrier, has been a political hot potato.

While the consecutive governments have managed to create a consensus over many years, even now, some sections of the Indian polity⁠— including the Rashtriya Swayamsevak Sangh (RSS), the ideological parent to the ruling Bharatiya Janata Party⁠— insist that the sale should be to an Indian company.

Air India’s privatisation plan is entering its final lap, and the deadline for submitting the EoIs (Expressions of Interest) is set for today (December 14). This was the fifth time the government had extended the deadline after receiving a subdued response for Air India’s divestment plans. After submitting the EoIs, the bidders will be required to submit the physical bids within 15 days— i.e., by December 29.

TRIVIA: India’s flag carrier was actually founded by JRD Tata of Tata Sons.

The government has extended the intimation date for bidders for Air India to January 5, from the earlier date of December 29. This is the date for announcing the shortlisted bidders. The physical bids need to be in by December 29.

The Adani Group (which operates nearly half a dozen airports in India) and the Hinduja Group are some of the other players bidding for Air India However, none of these business houses have made it official yet.

The Hinduja group also tied up with Lufthansa to become a potential bidder in the privatisation of Air India.

And, a group of 209 employees of Air India were on the hunt for a private investor to back their bid for the national carrier. However, Air India’s pilots’ unions have advised their members not to take part in the employees’ bid to take over the airline via the divestment process.

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