Before 2020 happened, the sale of Air India was a highly anticipated event in the aviation industry. India’s flag carrier was up for a full sale, along with its subsidiaries, after years of turmoil. While this year’s crisis has slowed down the original plans for the summer sale, the government is still keen to privatize the airline. With a deadline of August 31st, the sale is heating up and there seems to be a leading bidder.
Final date set
Recently India’s Civil Aviation Minister, Hardeep Singh Puri, told ET that the August 31st date will not be extended. Until now, the government had been routinely extending the bidding date since April, seeing the impact the crisis is having on the global economy. However, this has not changed the government’s original plan of selling the airline.
In recent weeks, the government has moved to push the sale for the beleaguered flag carrier. Now, 100% of the airline can be purchased entirely by a foreign entity, reversing previous rules. This means, hypothetically, a foreign airline could buy Air India and merge operations. Although the leading bidder for Air India is not new to Indian aviation.
Leading bidder emerges
According to sources, there may only be one bidder for Air India: the Tata Group. The Tata Group is a major Mumbai-based industrial conglomerate, who have a long history with Indian aviation, include as founders of Air India. Currently, the Tata Group owns 51% of Vistara and AirAsia India.
The Tata Group has previously shown interest in Air India through Vistara, pointing to the carrier’s major position in the international market. The group has also previously tried to purchase the airline but has been unsuccessful. However, with only one bidder and time running out, Tata might just emerge successful this time.
The Tata Group will bid alone for the flag carrier, with Singapore Airlines opting not to, increasing its airline portfolio to three carriers. However, with under a month to go, it is still possible for plans to change and new bidders to emerge. Airlines and companies around the world have previously shown interest in Air India, and while the current crisis has made aviation less lucrative, Air India still remains appealing.
A new leading carrier
An Air India purchase by the Tata Group could give rise to a new era in Indian aviation. It is possible that Tata would merge Air India with Vistara since both aim to offer international flights, after making structural changes to the airline. However, it’s still a bit early to start thinking of the new livery for the carrier.
With the government not looking to further fund the loss-making Air India, a quick sale to the Tata Group could be ideal. However, a lot could change between now and the next few weeks and we’ll be sure to keep you updated on everything!
What do you think of a Tata takeover of Air India? Let us know in the comments below!
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