Both Tata Group and Singapore Airlines may team up to acquire stake, report says.
Mumbai: Tata Group, that had once owned and ran Air India, is reportedly planning to buy controlling stake in the national carrier that has huge debt burden of over Rs 58,000 crore, according to a report in ET Now.
Tata Group will buy the said stake in partnership with the Singapore Airlines. Both the companies already run a joint venture airline Vistara in India. The recent report if turns out to be true would be a 'home coming' for Air India that was originally founded and run by Tata Group before the airline was nationalised in 1953.
The report adds that Tata Sons chairman N Chandrasekaran has held talks with the government and has expressed Group's interest in buying a controlling stake in Air India with a 51 per cent equity holding.
Air India has been kept afloat on a Rs 30,000 crore government bailout package. Besides, the airline has an outstanding operating debt of some Rs 28,000 crore.
The government has pledged it would raise Rs 72,000 crore from strategic sale of ailing public sector undertakings in India. Air India divestment forms part of the latest government strategy to remove the carrier out of debt mess.
Air India has not registered profit over the past ten years since 2007. Over the past few years, the airline has taken massive hit to its revenues due to arrival of cheaper no-frills airlines in India's aviation sector.
Civil Aviation Ministry headed by minister Ashok Gajapathi Raju had earlier revealed that it wants to sell the carrier partly to turn it profitable and reduce the huge debt burden.
Market share of the national carrier has crashed sharply from 35 per cent some ten years ago to a mere 14 per cent in recent years. Air India has been reduced down to third position in terms of market player after number one IndiGo with 40 per cent market share and Jet Airways that commands 16 per cent market share, according to a report in The Financial Express.