Monday, June 26, 2017

Tata Can't Carry Air India's Excess Baggage

The Tata Group should quell speculation it wants a debt-laden national carrier to land in its lap.
The $103 billion conglomerate has shown preliminary interest in Air India Ltd., according to multiple reports in local media. Other Indian businessmen, such as Sunil Mittal of Bharti Airtel Ltd., have suggested that Bombay House, Tata's headquarters, would be the ideal rehab for the ailing, state-run carrier. The Indian government will soon make a call on privatizing the airline.
A firm "no" from the Tata Group would be helpful. The salt-to-software empire is still trying to live down one dangerously overpriced acquisition made a decade ago: the $12.9 billion purchase of Corus Group Plc's steel assets.
Air India was forcibly taken away from the group and nationalized more than 60 years ago, but that should make no difference now. This isn't the time to think emotionally about opportunities. Nor is there any point in revisiting the botched privatization attempt 16 years ago when the group -- together with Singapore Airlines Ltd. -- came close to acquiring control.
In theory, it's possible Chairman Emeritus Ratan Tata, an aviation aficionado, could salvage Air India and merge it with his joint venture with Singapore Airlines, giving the latter a firm foothold in what was the world's fastest-growing major aviation market last year. Airbus SE projects India's air traffic will expand more than fivefold between 2015 and 2035.
26/06/17 Andy Mukherjee/Bloomberg

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