Air India, the national airline of the country, was started by J.R.D. Tata and if reports are to believed, the airline could return back to the Tatas.
Finance Minister Arun Jaitley had recently re-ignited the talk of privatising the loss-making carrier. A business news channel, on Wednesday, said that Tata Group in partnership with Singapore Airlines may be looking to acquire the state-owned company. Tata Group chairman N. Chandrasekaran has reportedly held informal talks with the government regarding buying a controlling stake in the airline.
When asked for a comment, a Tata Group spokesperson said, “we do not comment on such matters.”
The Tatas are already present in the aviation sector through two companies—Vistara, a full service airline in partnership with Singapore Airlines and Air Asia India, a low-cost airline venture with Malaysia's Air Asia.
The Tata Group's interest in Air India is also not new. After all, it was the airline started by J.R.D. Tata, the group's founder. It had started off as Tata Airline in 1932.
On the possibility of privatisating Air India, Ratan Tata, now chairman emeritus of Tata Sons had told reporters in 2013 that "as and when it happens, we would be happy to look at it."
In an interview to national broadcaster Doordarshan in May, Finance Minister Arun Jaitley had said that Rs 50,000 crore worth of public money invested to run Air India could have rather been used for other things like school education.
The government think-tank Niti Aayog too has proposed the privatisation of Air India.
A similar privatisation plan was mooted under the previous NDA government led by Atal Bihari Vajpayee in 1999, but didn't materialise.
Under a financial restructuring plan announced in 2012, the airline received Rs 24,000 crore of the little over Rs 30,000 crore equity infusion promised by the government.
Struggling to compete with fast growing private carriers, its woes only increased when Air India and Indian Airlines were merged by the UPA government in 2007.
Finding a buyer now will be a equally difficult task, considering Air India has been a loss-making entity for many years now, currently accruing a debt close to Rs 50,000 crore. Its market share domestically stands at 14-15 per cent.
Furthermore, any new buyer would have also to deal with the many employee unions, which include the Air India Employees Union, Air Corporation Employees Union and Indian Commercial Pilots Association, which will be a difficult task.
As Civil Aviation Minister Ashok Gajapathi Raju said recently, the tax payer's money could not be committed for eternity, but finding a bakra (scapegoat) who would by Air India was difficult.
The cabinet is expected to take a final call with regard to the divestment of Air India, minister of state for civil aviation Jayant Sinha said.
