Tata Group may set up a holding company to consolidate its aviation ventures ahead of a possible Air India bid, the Economic Times of India reported on August 30, 2021.
The Indian government is privatizing Air India and expects final bids by September 15, 2021. Indian conglomerate Tata Group is likely to put in a bid, according to media reports.
The Tata Group currently has a 51% stake in Vistara and an 83.67% share in AirAsia India. With the possibility of Air India joining the group, Tata is reluctant to have three different companies for its airline ventures, the Economic Times reported, citing officials close to the development. Hence, after the bid, the multinational conglomerate intends to include low-cost subsidiary AirAsia India in the holding company,
Vistara – a joint venture between Tata Group and Singapore Airlines (SIA1) (SINGY) (SIA) – is unlikely to be included in the holding company in the near future, the Economic Times added.
If the Tata Group acquires the national carrier, it will lead to direct competition between Vistara and Air India due to their operational models.
According to the officials cited by the Economic Times, bringing Vistara into the holding company with Air India could help with economies of scale.
AeroTime has reached out to Tata Group for comment.
