Life has come full circle for Tata Group, as it reportedly emerges as only bidder for Air India

The Tata group is the only bidder in the fray for national carrier Air India with just a month left for the final bidding date. The Tata group, which already has a footprint in the airlines business, has shown interest in acquiring Air India, which at one point of time was under the Tata umbrella, news agency IANS has reported.

The other bidders will be known in due course as globally airlines are under severe stress due to the Covid-19 pandemic and the resultant disruptions on air travel and tourism.

The Tata group is likely to go ahead with the bid while its joint venture airlines venture, Singapore Airlines, has declined to join the Air India bid due to Covid-19 woes. The group is currently doing due diligence on the airlines. The last date for bidding is August 31 and the government is not in favour of extending the deadline, IANS said.

Air India has been passing through a critical financial condition from much before the Covid-19 onslaught. The crippling effect of the pandemic, especially in the aviation sector, has further plummeted its finances to a precarious position.

From Tata Airlines and Air India to Vistara and AirAsia India, the Tata group has been an important part of the growing aviation sector in India. The two joint venture airlines – the low-cost AirAsia India and full-service Vistara – operate independently with their respective business models. The Tata Group holds a 51% stake in Vistara, with the remaining stake held by Singapore Airlines Limited.

Air India’s biggest weakness is its huge financial debt. To tide over it, the government will transfer much of the total debt of Rs 60,074 crore to a special purpose vehicle. The new owner will have to take on only Rs 23,286.5 crore as debt.

In 2018, the government had tried to sell the airline offering a 75% stake. But it didn’t work. Now, they are ready to sell the carrier, giving 100% stake to the prospective buyer.