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Air India was successfully bid by Tata Sons after a fight of 68 years

Air India back to it's owner Tata Sons

Air India sold back to the owner after 68 years of a long wait on Friday.

The union government announced the bid to be taken over by Ratan Tata group “Talace Pvt. Ltd. Has won the bid to own 100% government stake in Air India” says Tuhin Kant Pandey Secretary of the department of investment and public asset management (DIPAM). “Government spent 54,584 crores since 2009-10 as scarce support and 55,600 as guarantee support for Air India which total up to 1,10,276 crores” added Tuhin.

Air India Flight
It was the biggest ever consolidation in the airline industry that came to an end due to airline India’s survival. Because accumulated debt of about 1 lakh crore and additional losses of 22-25 crores on daily basis led to the shutdown of Maharaja. JRD Tata advised PM Nehru in 1952 to nationalizing the airline as he was convinced that “the national scheme was not of sound and will not create result in efficient and self-supporting air transport system”.

Earlier the government-owned airline India was not able to upgrade cabin for a long time while the planes can safely do the longest run but were not able to upgrade the entertainment screen. The passenger seats needed urgent repair as a part of the cabin upgrade. Tata’s sons decide to re-furnish the old ones with the new fuel-efficient aircraft.

Coronavirus impact: Air India to suspend flights to UK and Europe - The Hindu BusinessLine

It is said that Tata will pay 18,000 crores with debt retained at 15,300 crores and a cash component of 2,700 crores to the government to acquire the debt-laden carrier out of which 15% is to be taken by the government and the rest of the money will be used to clear the rest of the debts. This bid is higher than the previous bid made by Ajay Singh- chairman of spice jet at 15,100 crore debt to the retained at 12,835 crores and cash component at 2,265 crores.

Currently, TATA sons own four airline brands that are Air India, Air India Express, Air Asia India, and Vistara. Air India and Vistara are full-time carrier service providers whereas Air Asia India are low-cost carriers. After the official acceptance of Air India by a successful bidder is planning to bring Air Asia’s budget under Air India. If everything goes right Vistara is to be a joint venture between Tata Sons and Singapore airlines.

At present, there are 12,085 employees in Air India out of which 8084 are permanent employees and 4001 are on a contractual basis. Air India Express has 1434 employees. “ Tata group will retain the current year’s employee For Air India for the first year and in the second year they will see who they shall retain and can also give voluntary retirement services (VRS)” says Rajiv Gandhi Civil Aviation secretary.

It is said that Tata will get Air India’s intangible assets such as 900 landing slots of International Airport and 1800 international and 4400 domestic landings slots at Indian airport.

Air India under Tata Sons Group


The government on air India’s logo and brand said that “the current bidder Tata sons will be retaining it for five years the next step would be the letter of intent (LOI) and signed a share purchase agreement following viewing all the terms and conditions laid down by the government and the successful bidder it is expected that the transaction would complete by December 2021” announces Ministry of Finance.

Tata Sons was established by India’s 1st licensed pilot legendary JRD Tata. Currently, the Tata industry is the owner of luxury cars such as Land Rover and Jaguar. Tata has been one of the most trustable brands in India. Tata has been salt to software multinational manufacturers.

Tata has been operating in 100 countries on 6 different continents.
After winning a successful bid Tata tweets “ On an emotional note, Air India under the leadership of Mr. JRD Tata has at one time gained a reputation of being one of the most prestigious airlines in the world. Tata will have the opportunity to regain the image and reputation it enjoyed in earlier years. Mr. JRD Tata would have enjoyed if he was in our midst today”.

See also:-Top 10 Profitable business in India

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