Tata Sons to take over Air India, wins bid at ₹18,000 crore; staff to be retained for 1 year
Tata Sons has emerged as the winner in the Air India bidding at ₹18,000 crore and will be taking over the debt-laden airline. The finance department assured that there will be no sacking of the employees for a year. With this, the airline will go back to the Tatas who have a long history with the national carrier. JRD Tata founded the airline in 1932 and it was at that time called Tata Airlines.
Tata Sons bid ₹18,000 crore for the government's 100% stake in Air India, a finance ministry official told reporters. The bid by the consortium led by SpiceJet chairman Ajay Singh was ₹15,100 crore.
Tata Sons was the frontrunner as they bid the highest but the political nod on the decision was awaited. Reports said the Tatas are also willing to acquire up to 15 per cent of Air India's debt.
“At the Tata group, we are delighted to be declared as the winner of the bid for AIR INDIA. This is a historic moment, and it will be a rare privilege for our Group to own and operate the country’s flag bearer airline. It will be our endeavour to build a world-class airline which makes every Indian proud.On this occasion, I would like to pay tribute to JRD Tata, pioneer of Indian aviation, whose memory we cherish.” a spokesperson of the Tata Sons said.
The government has been trying to sell Air India for quite some time now but the process witnessed several hiccups, including that of the pandemic. To keep Air India flying, the government loses ₹200 million every day and the accumulated loss is now over ₹700 billion, officials have said.
In this bidding, the one which has been won by the Tata Sons, the government relinquished its stake and now 100 per cent of Air India's stake goes to the Tatas. The Tatas will now control Air India's 4,400 domestic and 1,800 international landing and parking slots at domestic airports, as well as 900 slots at airports overseas, including London's Heathrow Airport.
Apart from 100% stake in Air India, the Tatas will get 50% of AISATS, which provides cargo and ground handling services at major Indian airports.
Air India is one of the most extensive flight service providers in India flying to 98 destinations (56 domestic destinations with around 2,712 departures per week and 42 international destinations with around 450 departures per week) as of November 1, 2019.