Tata group likely to bid for Air India by Aug-end

The TATA group is likely to make a formal bid for Air India by the end of this month. The central govt had, in January, invited preliminary bids to divest its entire stake in Air India and the airline's subsidiary Air India Express along with its joint venture Air India SATS Airports Services Private Limited. The deadline was extended till August 31 as the coronavirus outbreak disrupted economic activities globally.

New Delhi: The government will not extend the deadline of bids for Air India beyond August 31 for the fourth time and the Tata Group is likely to make a formal bid by the end of this month, sources aware of the development told ETV Bharat.

"Not only the Tata Group but few other entities like Germany's Lufthansa, UAE's Etihad Airways, have also shown their interest for its stake in state-run carrier Air India," said sources.

Currently, steel-to-autos conglomerate Tata Group owns the majority of the shares in two airlines, Vistara and Air Asia India. As per the industry experts, if the Tata Group bids successfully for Air India, then the group will have a fleet of 146 aircrafts.

In 1932, the national carrier was started as a division of Tata Sons Ltd and was run as Tata Airlines till 1946 and after which it became a public limited company and was renamed as Air India.

The Centre had in June extended the deadline to submit an EoI (expression for interest) for Air India till August 31 as the coronavirus outbreak disrupted economic activities globally.

Notably, this is Modi government's second attempt for Air India divestment. In 2018, the government was offering to sell 76% but it failed as no bid was received for the national carrier.

In January, the government had invited preliminary bids to divest its entire stake in Air India and the airline's subsidiary Air India Express along with its joint venture Air India SATS Airports Services Private Limited.

Of the airline's total debt of Rs 60,074 crore as of March 31, 2019, the buyer would be required to absorb Rs 23,286 crore, while the rest would be transferred to Air India Assets Holding Ltd (AIAHL).

The aviation sector has been hit hard by coronavirus pandemic with airlines cancelling international flights and inconsistency among the state governments regarding quarantine rules for air passengers.

All airlines in India have taken cost-cutting measures by announcing pay cuts, LWP and firing of employees in order to conserve cash flow.