Tata Group to soon buy national carrier Air India? But there is a catch

The Narendra Modi government has reportedly approached the Tata Group to buy Air India which is currently struggling to hold up financially

Will the Tata Group buy national carrier Air India? The Narendra Modi government has reportedly approached the Tata Group to buy the national carrier which is currently struggling to hold up financially. It is not yet decided whether the government will opt for a partial divestment will it completely sell off the national carrier. The Tatas are the original promoters of Air India.

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 ‘informal’ meeting is said to have triggered rumours over a possible deal between Tatas and Air India. The report also states that the Tata group does not seem to be too keen on buying Air India unless the government takes a call to do away with a significant amount of Air India’s Rs 50,000 crore-plus debt.

As per reports, the Tatas have shown an interest in buying 51% stake in Air India. However, there is no official word on the matter from the Tata Group.

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The Tatas were the original owners of Air India. In 1932, JRD Tata had pioneered aviation in India with the launch of Tata Airlines. Air India was rebranded after 14 years and thereafter nationalised in 1953. As per reports, the Tatas had shown keen interest in Air India nearly 16 years ago when the government had decided to do away with 40% stake in the airlines.

If acquired, this will not be Tata’s sole venture in the aviation industry. They are already operating two two airline joint ventures – AirAsia India and Vistara. While it owns 40% stake in AirAsia India, Tata has 51% stake in Vistara.

If the deal is finalised and Air India becomes a part of Tata, Vistara may benefit by using Air India’s overseas network and fleet to fly internationally.

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