In what could be one of the biggest aviation deal in India, Tata Sons Ltd is in pursuit of a controlling stake of debt-laden Jet Airways, a purchase which could transform India's largest conglomerate from airline fringe player into the country's dominant, full-service international carrier.

The Jet Airways stock soared in the trade as investors pin their hopes on Tatas stepping in to revive the airline.

Tata Sons chairman N Chandrasekaran is pitching for the acquisition of cash-strapped Jet Airways, even as Chairman Emeritus Ratan Tata has reservations about the proposed deal, multiple sources told CNBC-TV18.

Sources also said Tata Sons board will likely discuss the Jet Airways acquisition plan on Friday and if the board approves, the proposed deal may "move quickly".

The government is keen on the deal going through as it does not want another full-service airline to go down, said sources.

So will Tatas board Jet Airways? And what could a potential merger mean for Indian aviation? To discuss this further, CNBC-TV18 spoke with Kapil Kaul, Centre for Asia Pacific Aviation (CAPA); Mark Martin, founder and CEO, Martin Consulting; Ajay Awtaney, founder and editor, Live from a Lounge and Devesh Agarwal, aviation expert.

Talking on the possibilities of the Tatas boarding Jet, Awtaney said Tatas coming in as a white knight to save Jet Airways is a good thing for both the parties.

When asked what could be the big imponderables ahead of the discussions, Kaul said consolidation in the sector is inevitable and if it happens in this form, it will be good for Jet Airways and will be positive for Tatas as well.

“The deal has to be structured, has to be made win-win for both and those are the steps the two companies will take. It is directionally positive for the sector,” Kaul said.

“If the acquisition takes place it has to be a complete takeover. It may be possible that till the merger is complete and milestones of the merger are achieved, the current promoter and management need to stay on board but it will be much quicker than the 3-5 year that is suggested," he said.

Agarwal said it would be a strategic fit for Vistara. Jet Airways needs cash and Vistara needs slots which Jet brings at all major Indian Airports but most importantly the slot in Mumbai, he said.

Jet would also bring in slots in international destinations like Heathrow and Hong Kong, which are difficult to obtain, Agarwal added.

Martin said Tatas would in fact be getting two airlines if the deal goes through that is Jet Airways and JetLite.

“So with this acquisition, we would be looking at a combined market share, which should be possibly comparable to Air India. So in terms of pecking order we are looking at Air India, Vistara-Jet Airways and the rest. So the significance of the deal has to be realised,” said Martin.

First Published:Nov 15, 2018 10:03 PM IST