Tata and Singapore Airlines teaming up to acquire ailing Air India

Tata and its global aviation partner – Singapore Airlines are thinking fast to acquire a controlling stake in the ailing Public-sector Carriage Air India. Decades back, Air India was nationalized by Jawaharlal Nehru when it was one of the entrepreneurial marvel of the Tata empire.

Talk of a Tata return is intensifying among government circles. Reports indicate that the private sector giant has made talks with several government officials to practically rescue the ailing government transporter that has a loss between Rs 50000 crore to Rs 60000 crores. Perhaps this is the major factor that comes as a big disincentive for both Tata and the Singapore airlines to bring it in their board.

Though absolutely poor on profit front, Air India is one of the largest operators in the world. It has a fleet strength of nearly 158 aircrafts. More than that, the company has established flight operations with almost all major cities in the world.

Air India’s established presence as a national carrier with route possession is the right shot and for Tata such an advantage is big though it should accommodate the loss factor.

Reports indicate that government is thinking to retain 51% share in the carrier. Such a situation may hamper the operational autonomy which is badly needed for its restructuring.

Tata alliance may be investing 49% according to early indications. Still, government may transfer management control to the Tatas expecting a turnaround in the loss scenario. The Tata alliance entering as a strategic partner is also a clear possibility. 

Tags : air india - tata deal prospects