Its confirmed! Tata Sons considering buying Air India

It is not a speculation anymore! All the gossip around whether the Tata Group was keen on acquiring Air India has come to a grinding halt with Tata Sons executive chairman Natarajan Chandrasekaran acknowledging that “they will look at it.” He made this revelation in an interview to CNBC-TV18 – which was released very recently.

Earlier, the central cabinet had approved a systematic disinvestment of Air India and five of its subsidiaries to recover losses amounting to thousands of crores. In a related development, merely hours after the government announcement, IndiGo had expressed its willingness to acquire the national carrier.  Now, with the Tata Sons in the fray, the battle to own Air India is likely to intensify.

Speaking to CNBC-TV18, Chandrasekaran termed the move a “strategic decision” and, therefore, there was a need for a long-term story, he said.  “We still don’t have all the details. Every business proposal will be very seriously looked at and we will look at that (Air India). Definitely. But currently we don’t have the data… there are so many different groups within Air India and then there is real estate, there is debt, there is liabilities and we got to look at all of that it but we will definitely look at it.”

Noting that TATA Group needed to view aviation as a whole, he said “we have a team which can definitely spend the time as soon as the details are out. We are subscale. We got two airlines both are subscale. Any decision that we take—Air India or otherwise—we have to have a story because we can’t be operating with 15 aircraft or 20 aircraft.” Stressing on the need of maintaining a scale to streamline operations, he argued, “I feel scale is important, in every industry in every group we operate in scale is important. Without scale, you get to a situation where you are all over the place and it is very, very difficult to pay management attention.”

Air India, despite pending legacy issues, is a formidable airline. It boasts of an enviable domestic network and has steadily expanded its footprints to Europe and North America, apart from Southeast Asia and Australia. It has modern fleet of aircrafts. More importantly, it is India’s national carrier and, therefore, operating rights must remain in Indian hands, irrespective of how the ownership arrangement pans out. It is a well-known fact that Air India was started by Tata Sons – Jamshedji Tata founded it in 1932. It was nationalised in 1952. The wheel may turn full circle with Tata Sons throwing its hat in the ring for buying Air India. 

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