Tata Sons is all set to file an expression of interest (EoI) on Monday for Air India, the same airline founded 88 years ago by the group patriarch J.R.D. Tata. Monday is the last date of submission for EoI to bid for the debt-ridden national carrier.

According to various media reports, the Tata group will use Air Asia as a vehicle where Tata Sons has a significant majority stake. Several news reports said that Tata Sons was considering to slowly raise its stake in AirAsia India to more than 76 per cent by the end of 2020-21.

Air Asia as an investment vehicle indicates that the Tata group has made its way to negotiate with Air Asia founder Tony Fernandes, who holds the rest 49 per cent stake in AirAsia India. According to the shareholders' agreement in AirAsia India, the Tatas cannot invest more than 10 per cent in another budget airline without Fernandes being willing to waive the covenant.

Singapore Airlines (SIA), with which Tata Sons operates full-service airline Vistara, will not be part of the bid in the initial stages, media reports said. The group was reportedly in talks with SIA to waive off a non-compete clause and partner with it in a proposed bid for the beleaguered national carrier Air India.

Tata group's interest in Air India was made public in an interview by Tata Sons Chairman N. Chandrasekaran in November last year. Chandrasekaran had indicated that Air India acquisition could work only if it is merged with its Vistara or Air Asia operations.

Media reports suggest that apart from Tata Group, Adani Group, Hinduja Group and many others are weighing bids for the debt-ridden airline, despite the pandemic taking its toll on the sector. The name of the shortlisted bidders will be announced later by the government.

Interestingly, history would come full circle for Air India with Tata's bidding. JRD Tata, the patriarch of the Tata Group, founded the airline in 1932. On October 15, 1932, JRD Tata flew a Puss Moth aeroplane from Karachi to Mumbai, marking the first flight of Tata Air Services. Later, in 1953, the government nationalised Air India, much to JRD Tata's dismay. However, he continued to be the chairman of Air India, until he was removed in 1977 by then prime minister Morarji Desai.

And with JRD's exit started the decline of the Maharaja. Currently, the airline sits on a debt of Rs 58,000-crore.

(The story first appeared in The Week)

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