Air India returns to TATA fold after 68 years
After 68 years TATA Sons acquires Air India for Rs. 18000 crores. TATA has to take the debt responsibility of Rs. 23286 crore owed by Air India, which has a total loss of Rs. 70,000 crore.
New Delhi: Finally Air India has returned to the fold of TATA Sons after 68 years, the TATA Sons win the Air India bid for Rs.18,000 crore.
Besides hundred percent of acquisition of Air India and its low-cost arm, Air India Express, the TATA sons also win a bid also includes 50% stake in ground handling company Air India SATS Airport Services Private Limited (AISATS)
Tata Sons and SpiceJet chairman Ajay Singh had participated in the bidding, along with acquisition, TATA has to take the debt responsibility of Rs. 15,300 crore owed by Air India, which has a total loss of Rs. 61,562 crores as on August 2021.
Mr Pandey stated that out of total debt ₹ 46,262 crore debt will be transferred to Air India Assets Holding Limited (AIAHL), he added. AIAHL is an SPV formed by the government.
Civil Aviation Secretary Rajiv Bansal said that the winning bidder shall not relieve any employee for a minimum period of one year and if retrenched after a year, they will have to be offered VRS (voluntary retirement scheme) Besides, Gratuity and Provident Fund (PF) benefits will be provided to all employees, he added.
Mr Bansal added that, "As of today, there are 12,085 employees in Air India out of which 8,084 are permanent and 4,001 are contractual. Besides this, Air India Express has an employee strength of 1,434."
Despite running under huge losses Air India still controls more than 4,400 domestic and 1,800 international landing and parking slots at domestic airports, and 900 slots overseas.
Air India began life as Tata Air Services in 1932 when it was founded by JRD Tata. The company was nationalised by the government in 1953. JRD Tata continued to be its chairman till 1977. Air India became the first Asian airline to induct jet aircraft and started flying to New York in 1960.
Department of Investment and Public Asset Management, Secretary Tuhin Kanta Pandey explained that Air India occurring losses of daily 20 crores, by end of the December the financial transaction will be closed. The immovable assets of Air Indi with the Government of India. Total five bidders had participated, in which two of them had qualified, he said.
The government has sold 100 per cent of its stake in the state-owned national airline, including Air India's 100 per cent shareholding in AI Express Ltd and 50 per cent in Air India SATS Airport Services Private Ltd.
The stake sale process, which began in January 2020, faced delays due to the COVID-19 pandemic. In April 2021, the government asked potential bidders to put in financial bids. September 15 was the last day for putting in financial bids.
In December 2020, the government invited expressions of interest for the divestment of Air India. Four bidders entered the race, with the Tatas and Ajay Singh the only ones to make it to the final stages.Ratan Tata tweeted welcome back Air India.