Tuesday, February 04, 2020

Tatas, Singapore Airlines close to making a joint bid for Air India

The Tata Group wants to fly Air India, the carrier it founded 87 years ago. According to a TOI report, the Tatas are moving close to making a bidding call for the national carrier in partnership with Singapore Airlines. They have already started working on the structure for such an acquisition, including a merger of AirAsia India, in which they hold 51%, and Air India Express, a 100% subsidiary of the national carrier.
 The Tata Group, the report added, is learned to have approached Tony Fernandes, the Malaysian entrepreneur who holds 49% in AirAsia India, for his approval to acquire AI Express. The shareholders’ agreement stipulates that Tatas can’t invest more than 10% in another budget airline without Fernandes being willing to waive the covenant.
 A new agreement, the report added, is expected to be signed soon. In lieu of the waiver, the Tatas have proposed to combine AirAsia India and AI Express. “The merger will give Fernandes a bigger play in Indian aviation; so, it’s a win-win for both partners,” said a person with knowledge of the discussions.
 AirAsia India took to the skies in 2013 as a joint venture between Tata Sons & Fernandes’ airline company, heralding the return of India’s largest conglomerate to aviation, a business it had pioneered through Air India before the carrier was nationalised. Tatas also operate Vistara, a full-service carrier, as a 51-49% JV with Singapore Airlines. Tata Sons chairman N Chandrasekaran has in the recent past told TOI that the company “will not run a third airline unless we merge”. A combination of Air India and Vistara would give the Tatas a monopoly in the full-service space.
04/02/20 Economic Times
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