Over three months after reports emerged suggesting that Tata group had sought details of the Air India disinvestment in meetings with government officials, the group has formally confirmed that it is considering buying the national carrier and that it is awaiting details from the government on the process.
This is the first formal statement by the group on Air India since the government announced its decision to sell the airline earlier this year.
“We will definitely look at it,” Natarajan Chandrasekaran, Executive Chairman of Tata Sons, told CNBC TV18 in an interview on Monday.
“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.”
The Tata chief said Air India would be a “strategic decision” and therefore “data” and “long term story is required”.
Tatas have already launched Vistara in alliance with Singapore Airlines and AirAsia India.
Chandrasekaran further said scale was important from several aspects. “We are subscale. We got two airlines (Vistara and AirAsia) 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. 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."
He also indicated Tatas have looped in Singapore Airlines to potentially look at Air India jointly as they had in the past but failed.
“Do you think I would not have?” he asked, in reply to a question on talks with Singapore Airlines, but declined to comment further.
In 2000, Tata group and Singapore Airlines had expressed their interest in acquiring up to 40 per cent of Air India. In 2013, after a meeting with then aviation minister, Ratan Tata had said the Tata group would be interested in buying a stake in Air India if the government were to privatize the airline.
Air India was launched in 1932 by J.R.D. Tata as Tata Airlines. Its name was changed to the current one in 1946. The government decided to take it over in 1953.