Tata Sons, a holding company of the Tata group, might bid for the national carrier, Air India. The debt-laden airline’s bidding had to be postponed by the government of India four times earlier this year because of the global pandemic. But now, Tata Sons, the majority stake owner of Vistara along with Singapore Airlines (SIA) is all set to make the bid for Air India. But there’s just one problem. For Tata Sons to make this bid, it would have to go against a no-compete clause it has with SIA. More details on the story ahead.
Tata Sons Talking With Singapore Airlines to Bid for Air India
There is a good chance that Singapore Airlines will give Tata Sons the green signal to bid for the national carrier. As per a report from The Economic Times, the Indian conglomerate is ready to bid for the national carrier alone in case SIA doesn’t support irrespective of the outcome.
Currently, Tata Sons has its hands on two of the airlines in India, namely Vistara with SIA and AirAsia India with AirAsia Berhad. A thing worth noting here is that Tata Sons doesn’t really have a robust financial portfolio with its multiple airlines in the country. Thus if Tata Sons were to acquire Air India, the airline is likely to group it under a single entity.
An official close to the matter said that the Chairman of the group has expressed that there can’t be multiple airlines. Since both Air India and Vistara are full-service carriers, Air India can fall under the business operations of Vistara. But this won’t be able to happen peacefully if SIA doesn’t give its approval for the bidding.
Meanwhile, it is not just SIA alone, but also Temasek which owns the majority stake in SIA which would require to give its approval to the Indian conglomerate. Both Temasek and SIA have flagged their concerns to Tata Sons about bidding for the debt-laden Air India, but it looks like Tata Sons might not back-off here.
What’s worthy to note here is that it was Jehangir Ratanji Dadabhoy Tata, the first chairman of Tata Group who had founded Air India back in 1932, then known as Tata Airlines. Thus it explains the peculiar interest of Tata Sons on bidding for the airline.