Tuesday 26 January 2021
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Tata Group to buy Air India? Vistara studying proposal

JRD Tata had founded Tata Airlines in 1932, after which a Congress government forced him to get it nationalised in 1953. If the group buys the airline, it will in a way return to its original owner.

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Economy Business Tata Group to buy Air India? Vistara studying proposal

Air India, which began its journey as Tata Airlines, passing through the chequered route of the formation of Indian Airlines under the super-socialist regimes of Jawaharlal Nehru and Indira Gandhi, and merger with its international wing under the UPA government, may finally return to its original owners. Tata Group-run Vistara has said it is evaluating the bid for the tax money-draining airline. Vistara chairman Bhaskar Bhat said “We are evaluating Air India. Which company would not be interested in evaluating a sovereign airline of the country?”

The problem is that this is no confirmation that the Tata Group will take part in the bidding. “Whether we bid or not comes later,” Bhat said.

JRD Tata had founded Tata Airlines in 1932. A Congress government forced him to get it nationalised in 1953 by legislating the Air Corporations Act and then offered him some ‘mercy’ by letting him continue as the chairman till 1977.

Now, after a Narendra Modi government, inhibited by the howl of communists, coined a term “strategic disinvestment” in its first term but found nobody ready to buy the airline partially, it has decided to disinvest 100% of its stake in Air India. But there is opposition within the Sangh Parivar to the proposal.

Bhat explained Vistara’s process of evaluation, saying: “We (Vistara) are a joint venture,” which could imply a sister concern within the Tata Group may bid for it.

Chairman, Tata Sons, N Chandrasekaran had said earlier it was “too early” for the company to make a decision on Air India. “It is too early…”

That does not stop the market from speculating about Tata Group’s interest in Air India. There was a report some months ago that the group could bid for Air India in collaboration with Singapore Airlines, which, in turn, is a partner of Vistara.

With Vistara and AirAsia, the Tata Group re-entered India’s aviation business, the world’s fastest-growing aviation market. The group is made of mettle that wouldn’t be intimidated by happenings such as the Jet Airways’ shutdown or grounding of the Boeing 737 MAX aircraft. 

Meanwhile, the government has been categorical that there is no option now other than disinvesting Air India. Union Civil Aviation Minister Hardeep Singh Puri has said it in Sansad and wherever else he could.

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