MIAMI – Potential bidder for control of India’s national carrier Air India (AI) Tata Group could have control of the company as early as January. Tata Group is speculated to be the only eligible bid on the airline.
The bid deadline is currently set for August 31, and if the group’s bid is accepted, the takeover period will commence, which will span 90 days. This would put AI in the hands of Tata Group by November 30, or December 31 at the latest.
Tata Group is no new comer to the airline world, having two already existing airline subsidiaries with AirAsia joint venture AirAsia India (I5) and Singapore Airlines joint venture Vistara (UK).
Structuring Post Acquisition
While the official bid list is not known yet, Tata Group is widely believed to emerge as the only bidder. The group has been reportedly already working on a bid to be put in by the end of August deadline set by the Indian Government.
If Tata Group does assume control of AI, it is unclear what their intentions are for the operation of the national carrier along with their other two airline subsidiaries.
So far, nothing is confirmed, but there is speculation that the group will merge AI into its preexisting stake in I5, forming a single entity.
Air India has been in a rocky financial situation for some time now, but the COVID-19 pandemic’s effect on the industry served as a final blow.
This takeover deal with Tata Group could serve as a light at the end of the tunnel for AI’s employees, many of whom have been put on leave without pay.
Combating Air India’s Debt
On July 23, AI announced that it would not incur in job cuts after it said it planned to review a reduction of allowance of employees.
The carrier also said it would pay Flight Cre on the basis of number of hours flown.
Air India has a debt of US$9.4bn, a situation which in part compelled the Indian government to start the process of selling the airline to a private entity by January 2021.
Featured image: Air India Boeing 787 departing Melbourne in the morning light. Photo: Airways.