Tata Group no longer interested in Air India

Wednesday 27th May 2015 08:17 EDT

The Tata Group has virtually ruled out re-acquiring Air India when the government decides to divest in it. “That was 14 years ago (when Tatas were keen on buying back AI.) Not now,” Tata Sons-Singapore Airlines (SIA) JV Vistara chairman Prasad Menon said.

“SIA always says they learnt from AI (of JRD Tata era). We can learn from AI and SIA both (for Vistara),” he added. Menon, who has been asking the government to make it easier for new airlines to fly abroad so that Indian airlines can get their rightful share of international traffic to and from India from foreign airlines. Tatas are now in both the full service space with Vistara and low-cost segment with AirAsia India.

The Tatas and SIA had tied up in 2000 when the then BJP government had decided to divest 40% stake in Air India. A year later, SIA had walked out of that partnership due to an “adverse climate” and intense opposition to the privatization of AI.

AI was founded by JRD Tata in 1932 as Tata Airlines. The airline was later taken over by the government and has over the years fallen from its glory days under JRD's leadership. The UPA government had invited Ratan Tata to head an advisory board for AI. But, given the condition of the airline due to serious mismanagement by successive governments, Ratan Tata had declined that offer.

The current NDA government is also struggling with AI and has so far not been able to find any radical solution to revive the airline. It has not even been able to find a chairman for the airline. The current CMD's three-year-term ended last August and he has been given an extension for a year till a replacement is found.

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