The Narendra Modi government officially handed over control of Air India, the iconic but debt ridden national carrier, to the Tata Group on January 27. The ceremonial transfer of Air India was preceded by a meeting between Prime Minister Narendra Modi and Natarajan Chandrasekaran, chairman, Tata group.
Though the transaction was originally expected to be completed by December 2021, the deadline was extended to January 2022 on account of the “longer-than-expected time taken to complete procedural work”.
Air India will be the third airline brand in the Tatas’ stable—AirAsia India, in which the Tata group holds a majority interest, and Vistara, a joint venture with Singapore Airlines Ltd.
Talace Pvt. Ltd, a subsidiary of the conglomerate, had made a successful bid last October for Air India, the low-cost airline Air India Express and a 50 per cent stake in Air India SATS Airport Services Pvt. Ltd (AISATS), the ground handling arm, inking the deal for Rs.18,000 crore. As per the agreement, the Tata Group would pay Rs.2,700 crore by way of cash and take over Rs.15,300 crore of the airline’s debt.
The government had created the special purpose vehicle Air India Assets Holding Ltd (AIAHL) for holding debt and non-core assets of the Air India group in 2019. Air India had a total debt of Rs.61,562 crore as on August 31, 2021. Around 75 per cent of this debt, or Rs,46,262 crore, will be transferred to AIAHL. Non-core assets of Air India, including land and buildings, artefacts and memorabilia including an ashtray designed and gifted by Spanish surrealist artist Salvador Dali in the 1960s are also being transferred to AIAHL.
Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM), said that all formalities had been completed and the Air India disinvestment transaction was closed. Pandey disclosed that the entire Rs.2,700 crore had been received by the government and a new board would be in place soon. “We have transferred shares. [The] entire Rs.15,300 crore of debt which was to be retained, has also been accepted. So all processes are completed, ” Pandey said.
Rajiv Bansal, Secretary, Ministry of Civil Aviation, reiterated that the Tata group will have to retain 12,000 employees.Besides the Air India brand, the Tata group will get a fleet of 141 aircraft, of which 42 are leased, while the remaining 99 are owned. The Tata group will get control of the airline’s 4,400 domestic and 1,800 international landing and parking slots at domestic airports and 900 slots at airports overseas, including London’s Heathrow.
Expressing satisfaction at the successful conclusion in a time-bound manner, Civil Aviation Minister Jyotiraditya Scindia said: “This proves the goverment’s ability and the resolve to carry out disinvestment effectively in non-strategic sectors in the future. Best wishes to the new owners. I am confident that the airline will bloom under their wings, and pave the way for a thriving and robust civil aviation industry in India.”
The Tata Group taking over Air India marks a return of the airline to the Tatas after 67 years. It was the Tata Group, led by the redoubtable J.R.D. Tata, that founded Air India as Tata Airlines in October 1932. The airline was nationalised by the government in 1953.
COMMents
COMMents
SHARE