New Delhi: – The bid submitted by Tata Sons for Air India was found to be the highest and the group of Ministers has approved the Bid of Tata Sons. Therefore, the TATA group has regained control of Air India. In 1953, the Indian government nationalised Air India through an ordinance. Thus, Air India, a company owned by the Tata group, became national property. But since the last few years, Air India has been reporting losses. The debt burden of Air India has reached a whopping ₹ 600 billion. Besides, as it was impossible to turn Air India around even through a bailout, the government decided to hive it off. Ratan Tata expressed his pleasure with a ‘Welcome Back’ message on social media.
Tatas and SpiceJet consortium made a bid for the purchase of Air India. The government had set a support price of ₹ 129 billion for the purchase of Air India. The focus was on who would buy Air India with a bid higher than this. A few days ago, the bidding process for the purchase of Air India was completed. The bids were opened last week. At that very time, it was almost certain that Tata would regain ownership of Air India. However, the government clarified that the decision has not been finalised; it will be announced after getting approved by the group of Ministers.
On Friday, the union government announced that the bid submitted by Tatas has been approved by the Group of Ministers. Tata had bid a total of ₹ 180 billion for Air India. This bid was much better than that of SpiceJet. The transfer of Air India to Tata will be completed soon. The transfer process will be completed by December, the official said. Apart from this, Tata Air India will also repay ₹153 billion, out of a total Air India debt of ₹615.60 billion. The remaining ₹422.62 billion will be reimbursed by the government through Air India Asset Holding Company.
Apart from this, the government has laid down certain conditions while selling Air India to Tata. According to this, no staff member can be removed for the next year. The VRS process can be implemented after one year, or the workers can be kept in service for the following year. Apart from this, Tata will not change the Air India brand for the next five years.
Since 2009, the government has provided financial assistance to save Air India from time to time. The government has invested over ₹1 trillion in Air India. Air India was bailed out on two occasions. However, instead of giving frequent bailouts to loss-making Air India, the idea was to spend money on public works. The government then decided to disinvest in Air India. The government had agreed to sell a 76% stake in Air India in 2018. But no company responded to the proposal. The government then decided to sell Air India entirely. The process, which was postponed due to the Corona crisis, was resumed in April.
Air India was started by Jahangir Tata (JRD) in 1932 under the name Tata Airlines. Later in 1946, the name of this airline was changed to Air India Limited. However, after independence, in 1953, the Government of India passed the Air Corporation Act in Parliament and took over Air India and nationalised it. However, JRD Tata was the Chairman of Air India till 1977. For many years, the Tata group wanted to return to air service. In 1994, Ratan Tata made a joint venture with Singapore Airlines. But this was not possible due to the regulations in force at that time. Tata SIA Airlines was launched in 2013 with the help of Singapore Airlines. Tata launched a domestic airline called Vistara. At present, the company has 47 aircraft and the planes of Vistara operate 200 flights daily. In 2014, Tata also launched a joint venture with Malaysian company Air Asia. Tata has a 51% stake in Air Asia. Now Air India has also come into the Tata fold.
Ratan Tata expresses happiness with a welcome back reaction.
Tata Group Chairman Ratan Tata has expressed his happiness in a few words after the Group of Ministers sealed Tata Sons’ bid for Air India. Ratan Tata posted an old photo of JRD Tata with an Air India plane on social media. He also gave his reaction. ‘Air India, under the leadership of Mr. J.R.D. Tata had, at one time, gained the reputation of being one of the most prestigious airlines in the world. Tatas will have the opportunity of regaining the image and reputation it enjoyed in the earlier years. Mr. J.R.D. Tata would have been overjoyed if he was in our midst today.’ Ratan Tata assured that he would try to restore the glory of Air India, saying, ‘Welcome back, Air India.’
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