Nov 15: Tata Sons has plans to pick up stake in Jet Airways. The airline company had announced its loss for the third consecutive quarter recently. With the planned purchase, India’s largest conglomerate Tata Sons would become a dominant player in the Indian airline market. Tata Sons has its Vistara Airlines in the airline sector. If the purchase goes well the Indian giant will become a full-service international carrier.
Reports are that the Tatas are evaluating the deal so that it will stand ahead as the decision maker at Jet Airways. Any deal with Jet would be resourceful but Tata needs to have a clear idea of whether the deal will be apt for its aviation strategy, they added.
Tata will lead the Indian aviation market in terms of size if it buys the 124-aircraft fleet of Jet. If the deal comes through, 70 years after Tata’s first airline was nationalized and six years after it re-entered the market with two joint ventures, Tata would emerge as the leading airline company.
The other side of the news is that Tata is going to buy a company running on a loss with liabilities exceeding its assets. Reports said that, under the assumption that the company will get a capital injection, the accountants of Jet are all set with its financial results.
According to a report, if Tata wants to be successful in the sector it should completely concentrate on this sector. Tata is not prominent in aviation section like it is in various other businesses. But with the Jet’s fleet added to Tata, its aviation business will also get a prime position among the rest of its businesses. Vistara Airlines and Singapore Airlines are two of the airline firms that have stake held by Tata. Earlier this year, the company had given application to begin its international flights.
As per the sources, Tata is expected to combine Visatara and Jet which will make it easier for the company to garner international expansion. With the acquisition, the airline will travel from one extreme to another.