-NEW DELHI
(Air India had total debt of about Rs 48,877 crore at the end of March 2017 — Rs 17,360 crore of aircraft loans and Rs 31,517 crore of working capital loans.)
Tata Group and Singapore Airlines are open to bidding for troubled India’s national flag carrier Air India, Reuters Reports. The spokesperson for Tata Group first mentioned this option in October 2017, but said the Group would first evaluate key factors such as real estate, liabilities, debts, etc.
In October 2017 rumors emerged that Air India might go to its initial owner the Tata Group conglomerate, after the Group‘s chairman revealed Tata is considering the option, but needs additional information on Air India’s real estate, liabilities, debts, and other key factors first.
Now Tata‘s interest in the troubled carrier appears to be reassured, as Leslie Thng, the CEO of Tata Group and Singapore Airlines jointly owned Indian airline Vistara, told the media that “the two promoters are open to evaluating bids for Air India. They keep an open mind”. It is not yet clear whether such offer would be done jointly.
Air India was set up as Tatas Airlines in 1932. It was later made public and, finally, nationalized. Tata Group, in turn, had been withdrawn from the airline business for six decades before returning in 2013 with the set-up of two joined ventures.
After a $3.6 billion bailout could not fix the situation of the loss-making airline, in March 2017, the Indian government announced the decision to recover Air India within five years by selling a 51% share. The country’s government is working on the plan of its strategic disinvestment in the carrier, as it is under a massive debt burden of $8 billion.
In July 2017 reports emerged that Air India might be sold in parts, to make it more appealing to potential buyers, thus speeding up the sale process. On December 1, 2017, however, India’s minister for aviation said the airline is going to be sold intact after all, without separating its international and domestic operations.
Several companies have been reported expressing an interest in obtaining the airline. In June 2017, in a letter to the civil aviation ministry, IndiGo expressed an official interest to buy the national carrier in parts: the international operations and its profitable subsidiary – low-cost carrier Air India Express.
On November 14, India’s regional provider of gateway services and food solutions SATS has expressed interest in buying Air India’s ground handling unit. Earlier, Indian business conglomerate Bird Group and Celebi Aviation Holding also have shown similar interest in buying out the Air India Air Transport Service.
