Is it true that the Tatas are making a bid for Air India and what synergies do you see for the Tatas from such a deal?

While there is official confirmation from the side of the government, it has been reported in the press based on inside sources that Tatas are one of the candidates to acquire Air India. Ironically, once upon a time this company was a part of the Tata group and was floated by JRD Tata. To that extent it is more like a home coming for the Tatas.

As per reports, currently there are two known suitors for Air India. One of the suitors is the Tata Group, which is possibly looking to expand its footprint in the aviation space. Another possible suitor is the consortium of Air India employees; who are also bidding for Air India in what could be an employee driven management takeover of Air India.

For the Tatas, this is a natural extension of their aviation plans. It is well known that the Tatas already present in aviation via Air Asia and Vistaara. While both have been growing, they are still struggling to build market share and most of the incremental market share appears to have been cornered by Indigo, even in these tough times.

For Tatas, they are also betting on the possible consolidation in the Indian aviation industry. If Air India falls into the hands of the Tatas, then Air India, Air Asia and Vistaara put together will enjoy a combined domestic market share of 23%. This will make it the second biggest after Indigo, which has 55% market share. Tatas can emerge as the second biggest airliner.