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Tatas, Singapore Airlines forge alliance for Air-India pie

India's Tata business house on Thursday announced a tie-up with Singapore Airline (SIA) to bid for a 40 per cent strategic stake in Air-India.

The Indian group said its affiliates would lead a consortium with SIA as their foreign joint venture partner for a slice of Air-India's equity.

The Indian government has set Friday as the deadline for filing of bids. Tata chairman Ratan Tata announcing the tie-up said: "SIA is a global player with impeccable credentials which has grown over the last 28 years to become a universally-respected world class airline.

"Its airline operating competency will be a significant asset to the consortium and critical in ensuring the success of Air-India in the international market place."

SIA deputy chairman Cheong Choong Kong, meanwhile, expressed optimism at the Tata-led Indian consortium.

"We share a common commitment to the highest standards of quality, service and corporate values and will happily accept the opportunity, if given, to work with the Tata Group...," he said.

Official sources said eight other business houses also filed their bids Thursday for a 40 per cent stake in ailing Air-India.

An attempt by Tata and SIA to launch a domestic airline several years ago flopped in the face of stiff resistance to the proposal by Indian Airlines, the country's only state-run domestic carrier.

The Indian government is to sell a 60 per cent stake in Air-India, which has piled up losses of Rs 10 billion ($230 million).

Forty per cent will be sold to a "strategic investor" -- which would include a maximum 26 per cent stake for a foreign airline -- and 20 per cent to employees and financial institutions.

New Delhi has not estimated Air-India's net value but airline sources say the 40 per cent stake would go for around Rs 60 billion.

The Tata group pioneered aviation in India and was the original owner of Air-India before it was nationalised in the 1950s.

Air-India has a workforce of about 18,000, and its employee to aircraft ratio of about 700 to one is among the highest of any international airline.

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