Ratan Tata piloted group's foray in aviation, Mistry says he had no say in the decision

Tata Sons tied up with AirAsia in February 2013 to start an airline and six months later joined hands with Singapore Airlines.

Both the decisions occurred within a year of Cyrus Mistry taking over as group chairperson but now as Mistry's email to Tata Sons board members indicates he might have had little role in them.

The Economic Times today reported about Mistry's email which says the group foray in aviation was at the behest of his predecessor Ratan Tata. "In both the cases he had been presented with a fait accompli," the report said.

Under Mistry,  the group has been funding both the ventures but Ratan Tata's interest and involvement in the airline business is clearly evident. In 2013 Tata led AirAsia and Singapore Airlines bosses to meetings with then civil aviation minister Ajit Singh seeking approvals, tweeted on securing them and  in early February he also spoke out against the controversial 5/20 rule which scuttled overseas expansion plans of two airlines.

 

In July 2013 Ratan Tata was appointed as an advisor to the AirAsia India board.

"Aviation was never Mistry's choice. It was Ratan Tata's dream and it was he who steered it as much as he could," Mahantesh Sabarad, vice president, SBI Caps Securities said, according to an Economic Times report.

In July 2013, Forbes magazine had reported how AirAsia group CEO Tony Fernandes got Tatas on board for a new airline. Fernandes on a visit to India had messaged Tata after noticing J R D Tata's pilot licence at Airport Authority of India office. The government had liberalised FDI rules in aviation and the duo met up to explore possibilities. Later Tata flew down to Singapore to meet Fernandes and decided to start low cost airline in India, Forbes had reported.

Tata group's association with Singapore Airlines is much older.  In the early 1990s, P V Naras-imha Rao, then prime minister of India, met his Singaporean counterpart, Goh Chok Tong, and the idea that Singapore Airlines explore setting up a joint venture airline in India was floated

Business Standard earlier reported that in  1995, Tatas and Singapore Airlines devised a plan to set up a new airline with a fleet of 16 aircraft. The Tatas were willing to concede 60 per cent equity to Singapore Airlines but the plan fell through because of opposition from rival airlines and political parties.

Twice again Tata group tried to enter aviation.  In the late 1990s, Tatas offered to set up an airline of their own, with Singapore Airlines as a technical partner and in 2001 the two planned to collaborate when government proposed to divest stake in Air India. But these plans fizzled too.