Ratan Tata rules out Tata Group's entry in airline business

Tata group's outgoing chairman Ratan Tata has indicated that the group is unlikely to get into the civil aviation sector because of "destructive competition".

Recalling the group's proposal for a tie up with Singapore International Airlines (SIA) for a domestic carrier in India in the mid-1990s, the Tata patriarch pointed out, "it is a different sector today than it was at that time. It is somewhat like telecom. It is proliferated by many operators some of them in financial trouble. I would hesitate to go into the sector today in the sense that the chances are that you would have a great deal of competition which would be unhealthy competition."

Asked if he was worried about "cut throat" competition, Tata responded in the negative but went on to say "cut throat competition which is done to keep you out is destructive competition. Overseas, people go bankrupt or companies go bankrupt. Here they never do - they continue to be sick and still operate. Then they are operating to kill you."

In an interview with PTI, Tata was asked if the story that someone had asked him to pay a Rs 15 crore bribe to clear the Tata-SIA deal was correct, to which he replied in the affirmative.

"...but it was not the then Civil Aviation Minister who had asked directly to pay. It was a businessman who told me why don't you pay. This is what the minister wants," he said.

What was his response to the businessman? "I told him that you don't understand. That is not how we do business. All he said to me was, 'Look if you want the airline this is what you must pay. You know the minister wants that - Rs 15 crore'."

Tata recalled that after taking over as Chairman of the group in 1991, he had drawn up a strategic plan in which he had seen aerospace and defence a new area for the private sector to enter in a big way.

"For several years, the fact that we had sanctions of various sorts on us, gave us no access to technology and that in itself was a challenge." But that challenge was never thrown to the private sector which was a "bit of a disappointment to me", Tata said.

"Vested interests in the public sector and government laboratories do not not give these areas to the private sector. Therefore, while these areas have been opened up, the private sector's involvement is still very limited," he said.

With inputs from PTI