MUMBAI: The board of Tata Sons is veering around to back the proposal to acquire Air India, which has been put on the block by the Centre. However, the board, which met on Friday, wants Tata Sons and its aviation partners—Singapore Airlines and AirAsia Malaysia—to resolve structural issues before putting out an expression of interest for the state carrier. This is to avoid litigation at a later date, reports Reeba Zachariah.
The deadline to submit an EoI for Air India is March 17, but this will be extended, according to aviation minister Hardeep Singh Puri.
Earlier this week, Tata SIA Airlines, operator of full-service carrier Vistara, had said, “Which company would not be interested in evaluating a sovereign airline of the country?” Though Vistara is leading the M&A efforts, AirAsia India, in which the Malaysian budget carrier holds 49%, will also be a part of the arrangement for the potential Air India acquisition.
AirAsia India’s shareholders’ agreement stipulates that Tata Sons cannot invest more than 10% in another budget airline without the Malaysian partner being willing to waive the covenant. So, if Vistara, in which Tata Sons owns 51%, wishes to put in a bid for Air India including its budget carrier arm Air India Express, the Malaysian partner will have to waive the covenant. In lieu of the waiver, Tata Sons has proposed a merger between AirAsia India and Air India Express to create a larger budget airline.
Tata Sons’ arrangement with Singapore Airlines is only for full-service carriers. The Vistara-Air India combo will help Tata Sons to monopolise the full-service space in India.
Prohibida la reproducción parcial o total. Todos los derechos reservados de Rubicon, Global Trade, Customs & Business Partnership, S.C., del Autor y/o Propietario original de la publicación. El contenido del presente artículo y/o cualquier otro artículo, texto, boletín, noticia y/o contenido digital, entre otros, ya sea propio o de tercero alguno, publicado en nuestra página de internet u otros medios digitales, no constituye una consulta particular y por lo tanto Rubicon, Global Trade, Customs & Business Partnership, S.C., sus colaboradores, socios, directivos y su autor, no asumen responsabilidad alguna de la interpretación o aplicación que el lector o destinatario le pueda dar.