Discussions are being held between N Chandrasekaran, Chairman of both the Tata Group and Air India and SIA’s executives (FIle image of a Vistara aircraft)
Tata Sons, the controlling entity of Air India, Vistara and AirAsia India, is looking to merge the three carriers under a unified Air India banner, news agency PTI reported on September 21.
To make it work, the Tatas are likely to offer Singapore Airlines (SIA), its joint venture partner in Vistara, a stake in Air India, sources told The Economic Times.
The stake offer has been accepted “in-principal” by SIA, which holds a 49 percent share in Vistara parent Tata SIA Airlines, an ET report on September 23 quoted top executives as saying.
Moneycontrol could not independently verify the report.
Discussions are on between N Chandrasekaran, chairman of both the Tata Group and Air India, and SIA’s executives, the report added.
Tata Sons and SIA did not respond to queries, the report said.
Sources, however, said while SIA could agree to the merge, any financial infusion into Air India was unlikely as the airline is focussed on getting its business back on track.
Earlier this week, it was reported that the Tata Group had started an exercise to evaluate options to consolidate AirAsia India and Vistara under Air India. The goal is to bring operational synergies among the three airlines under its umbrella.
Air India CEO and MD Campbell Wilson has set up a team under the airline’s director of operations RS Sandhu to conduct the evaluation and submit a plan within one year, sources said.
The plan is to achieve consolidation of AirAsia India into Air India Express over a one-year period, while also targeting to bring all of the group’s airlines businesses under the Air India umbrella by 2024, sources said.
Tata Sons holds a majority 83.67 percent stake in AirAsia India. Its holding in Vistara stands at 51 percent.
Besides the airlines business, Tata Steel’s board has approved the scheme of amalgamation between seven of its group companies and itself, as per the company’s exchange filing on September 23.
These are Tata Steel Long Products, The Tinplate Company of India, Tata Metaliks, TRF, the Indian Steel & Wire Products, Tata Steel Mining and S&T Mining Company.
The resources of the merged entity have been pooled to unlock the opportunity for creating shareholders’ value and the share exchange ratio has been decided individually for the seven companies, as per the filing.
The proposed amalgamation is also part of Tata Steel’s continuing journey to simplify the group holding structure. The resulting corporate holding structure is expected to bring enhanced agility to the business ecosystem of the merged entity.