For some time now, the Central government has been looking out for a buyer and initiated the bidding process for the sale of the entire 100 per cent stake in Air India. After the first bidding process failed the government formally began the second bidding process on January 27.
Now, it is heard that the Tatas appears to be ‘moving closer’ to partner with Singapore Airlines to make an offer for Air India.In fact they are inching towards a final decision and are working on the deal’s structure. The company may merge Air India Express with AirAsia India for the acquisition of the government-owned airline. Interestingly, the non-compete clause in the agreement between AirAsia and Tata Sons does not permit either party from being involved in another low-cost airline.
Here, it may be recalled that Tata Sons and Singapore Airlines own full-service airline Vistara as a joint venture (JV). While Tata Sons owns a 51 per cent stake in AirAsia India, Malaysia-based AirAsia Berhad owns the remaining holding.
Let’s not forget that the Tatas founded Air India in 1932 as “Tata Air Services” and owned it till it was nationalised in 1947.