Rediff.com  » Business » Tatas likely to take call on cash-strapped Air India bid this week

Tatas likely to take call on cash-strapped Air India bid this week

By Arindam Majudmer
March 03, 2020 15:58 IST
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The last date to submit bids is March 17 but the deadline could be extended if there are requests from potential bidders.

Tata Sons and Singapore Airlines are actively weighing the option to bid for Air India and a decision to submit an expression of interest (EoI) could be taken soon.

Sources aware of the development said the board of Tata Sons, the holding company of the group, would meet later this week and possibly take up the Air India matter for approval.

 

Singapore government’s sovereign fund Temasek is also likely to be a part of the consortium being planned for the Air India bid, one of the sources said.

When asked about Tata group’s interest in Air India, Bhaskar Bhat, chairman of Vistara and a director in Tata Sons board, said the group was evaluating options.

"We are evaluating Air India. Which company would not be interested in evaluating a sovereign airline of the country?...Whether we bid or not comes later," he said. On whether Vistara or Tata Sons was evaluating Air India, Bhat said, "We (Vistara) are a joint venture".

The government has decided to sell 100 per cent stake in the airline and has invited bids for it.

The last date to submit bids is March 17 but the deadline could be extended if there are requests from potential bidders.

Officials involved in Air India’s sale process said a big reason why the Tata group didn’t submit a bid last time was the government’s decision to hold on to 24 per cent stake.

“They were interested last time too. But a big hurdle was that they wouldn’t have been able to merge Air India with Vistara unless they owned 100 per cent,” another source said.

After its unsuccessful bid to sell Air India in 2018, the central government this time has decided to off-load its entire stake.

Tatas, the salt-to-software conglomerate, and Singapore’s national airline operate Vistara, which inducted its first wide body aircraft Boeing 787-9 Dreamliner on Monday.

The wide body aircraft is the centre piece of Vistara’s business plan.

It’s expecting that supremacy in long-haul international routes will help it recoup losses due to the cut-throat domestic market dominated by low-cost airlines.

That’s among the reasons the Tata group is interested in Air India, which has slots and bilateral rights in all major airports across the world including some of the most constrained like Heathrow in London.

Unavailability of slots at Heathrow has forced Vistara to plan its London flight into Gatwick Airport- the city’s secondary airport  which isn’t popular among full service airlines.

“Anyone who operates to London ideally wants Heathrow Airport.

"We tried a lot but finding a slot in Heathrow is quite impossible at this point of time.

"No one wants to give up. We may start with Gatwick and shift to Heathrow whenever slots are available,” a Vistara executive said.

Photograph: Francis Mascarenhas/Reuters

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Arindam Majudmer in New Delhi
Source: source
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