The board of Tata Sons leans towards the offer to acquire Air India
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 the full-service airline Vistara, said: “Which company would not be interested in evaluating a sovereign airline in the country?” Although Vistara leads the mergers and acquisitions efforts, AirAsia India, in which the Malaysian budget airline owns 49%, will also be part of the agreement for the possible acquisition of Air India.
The AirAsia India shareholders agreement stipulates that Tata Sons cannot invest more than 10% in another economic airline without the Malaysian partner being willing to waive the pact. So, if Vistara, in which Tata Sons owns 51%, wishes to submit an offer for Air India, including its Air India Express budget transport arm, the Malaysian partner will have to waive the pact. Instead of the exemption, Tata Sons has proposed a merger between AirAsia India and Air India Express to create a higher budget airline.
The Tata Sons agreement with Singapore Airlines is only for full-service companies. The Vistara-Air India combo will help Tata Sons monopolize the entire service space in India.