Tata Group chairman says keen to bid for Air India
Photo Credit: Shah Junaid/VCCircle

India’s Tata conglomerate is interested in bidding for state-owned Air India as the group needs to increase the sizes of its aviation business, its boss told television channel CNBC TV18 in an interview on Monday.

Tata would “definitely look” at Air India once the government finalised the privatisation process, N. Chandrasekaran, chairman of Tata group’s holding company Tata Sons, told the channel.

He said Tata, which already has two small airline joint ventures in India, one with Singapore Airlines and the other with Malaysia’s AirAsia Bhd, was still not clear about what a sale would look like.

The government has not said whether it will sell all or parts of Air India and what it might do about the loss-making airline’s debt burden of $8.5 billion.

“We still don’t have all the details,” Chandrasekaran said. “We have two airlines, both are subscale. I feel scale is important.”

When asked whether Tata had spoken to Singapore Airlines about its interest in bidding for Air India, Chandrasekaran said: “Do you think I would have not?”

Tata’s interest in Air India has been reported but Chandrasekaran had not spoken publicly about a possible bid.

Prime Minister Narendra Modi’s cabinet in June gave the go-ahead to sell Air India, which has received $3.6 billion since 2012 in state aid.

Last month the government invited bids to appoint financial and legal advisors for the sale process.

Some companies including low-cost Indian carrier IndiGo, owned by InterGlobe Aviation, ground handling company Bird Group and Turkey’s Celebi Aviation Holdings have expressed an interest in buying some of Air India’s various businesses.

Air India, founded in 1930s by the Tata Group, is saddled with debts and a bloated cost structure.

Once the nation’s largest carrier, its market share in the booming domestic market has slumped to 13 percent as private carriers expanded.

Tata teleservices, tata motors

In Monday’s interview, Chandrasekaran also said “all options are on the table” when asked about the future of its struggling telecoms unit Tata Teleservices.

The Economic Times said earlier this month that Tata had told the government it intended to shut down Tata Teleservices.

“I will have to take a tough call and I will,” Chandrasekaran said, adding that a solution would be found this financial year because Tata could not continue to pump in cash to fund the company.

Chandrasekaran also said the group was focusing on improving returns at Tata Motors and ending production of its loss-making Nano car would make little difference to the firm’s profitability.

British luxury carmaker Jaguar Land Rover has long been the main source of revenues and profits at Tata Motors.

The company has said it will invest more than 40 billion rupees ($612 million) to boost sales of its passenger and commercial vehicles and return to profit in its domestic business.

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