“Ideally it should be a Vistara decision, not a Tata Sons decision,” Chandrasekaran said before adding, “I’m not going to run a third airline (in addition to Vistara and AirAsia). Unless we merge. There are issues. I will never say yes or no. I don’t know.”
The government has in recent months indicated is willingness to exit Air India completely, as opposed to its earlier plan of retaining a minority 24%. It drew a blank in its earlier attempt last year to disinvest 76% in AI; the Tatas didn’t show any interest because the terms were onerous, besides which the conglomerate was evaluating the purchase of Jet Airways.
“We will have to find a solution for our aviation business. I want to scale it up, but I also know that the business is likely to make losses until 2025,” Chandrasekaran said.
Acquisition of Air India would help the Tatas scale their aviation business. The group has two joint ventures—one a full-service airline with Singapore Airlines (SIA) to operate Vistara, and a second with budget carrier AirAsia. Combined, they made a loss of over Rs 1,500 crore in fiscal 2019.
There is a sense that unlike Jet Airways, Ratan Tata, chairman emeritus of Tata Sons and head of Tata Trusts, might be favourably disposed towards the acquisition of Air India, which his predecessor JRD Tata founded in 1932.
He was reported to be less-than-enthusiastic about Jet Airways, whose founder Naresh Goyal had waged a subterranean campaign against the conglomerate’s attempts to re-enter aviation in alliance with SIA back in the 1990s and early 2000s.
Air India would help Vistara grow internationally. Currently, Vistara flies to just four international destinations. Air India would also augment Vistara’s domestic market share, which presently stands at 6%, with its 12% presence.