Sunday, October 10, 2021

Tata Sons will have to pump in much more for Air India to take off

Tata Sons, which has taken over Air India with a Rs18,000 crore bid will have to spend more money-- which could work out to nearly the same amount -- to restructure the carrier.

A TOI report says it has already invested Rs 6000 in its existing airline startups, AirAsia India and Vistara, and lost over Rs 9,000 crore till date. Air India, which has not made a profit in the last 14 years, will add to that burden.

Aviation industry across the world is facing headwinds because of the current travel restrictions, and the Tata Group has estimated that its latest investment will not be profitable till 2025, when global passenger traffic returns to pre-Covid levels.

Tata Sons will have to find this money, even as it is making ambitious moves in digital, hi-tech manufacturing and health. Which shouldn’t really be an issue since TCS is continuing to do very well, and there is an upcycle in the steel industry. It can also raise capital by monetising its investments.

10/10/21 Bangalore Mirror

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