Tatas’ intent to buy Air India reaches due diligence stage

Conglomerate Tata Group which is being seen as the front runner in acquisition of Air India has intensified its due diligence process.
Tatas’ intent to buy Air India reaches due diligence stage
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New Delhi

According to highly placed sources, teams comprising of Tata group companies’ officials have been visiting Air India sites lately. “They are trying to get a hands-on experience and feel of the airline. Besides, they are keenly focusing on the HR side of the operations,” sources said. Generally, team comprising of Tata Group firms’ AirAsia India, TCS and others visit the operational and administrative sites of the national carrier. The development assumes significance since the submission of financial bids is due in September.
On its part, the national carrier has set up a ‘Divestment Cell’ to facilitate co-ordination between the Tata and Air India teams. Air India is said to be providing full support to these teams and facilitating their visits to the operational sites. Furthermore, the Tata teams have been given access to the airline’s operational areas such as ticketing, check-in-counters. Last week, the team visited several stations including Kolkata and the airline’s corporate office here in New Delhi. On last Friday, one such visit occurred at Delhi’s T3 based sites of Air India. At present, this is the largest operational site of the airline in the country. Besides, technical intelligence about the company is being sought from Tata Group’s airlines AirAsia India and Vistara.
Furthermore, contractual obligations and cost structure of Air India is being closely studied. “They (Tatas) already have two airlines. They are trying to assess the cost structure of Air India in comparison to their other airlines,” another source said. Other aspects such as type of software, rostering schedules and route dispersals are being studied. Additionally, customer complaints and files of old cases have also been sought, said one of the source. “They seem to be assessing the operational capabilities and areas of synergies. It would be interesting to see how they take over a running airline with addition of some new staff,” sources said. They added as soon as the deal is announced Tatas want to be in a position to deploy more resources at several stations across the country.

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