Tata Sons has won the bid to acquire national carrier Air India. More than half a century after the salt-to-software conglomerate handed over control to the government, it made a winning bid of Rs 18,000 crore. Besides a 100 per cent stake in Air India and its low-cost arm, Air India Express, the winning bid also includes a 50 per cent stake in ground-handling company Air India SATS Airport Services Pvt Ltd (AISATS).
Earlier this month, both Tata Sons and SpiceJet chairman Ajay Singh (in his private capacity) had bid. Reports last month that Tata had won the bid were dismissed by Union Minister Piyush Goyal, who then said nothing had been finalised.
In December 2020, the government invited expressions of interest for the disinvestment of Air India.
Four bidders entered the race, with Tata and Ajay Singh being the only ones to reach the final stage.
According to reports, Air India has incurred a loss of over Rs 70,000 crore and the government suffers a loss of around Rs 20 crore every day.
Tata Sons expects to take Rs 23,286 crore of the airline’s debt.
This was the second attempt by the Narendra Modi government to sell Air India.
The Center made an effort in March 2018, but its expression of interest – to sell a 76 per cent stake – went unnoticed on concerns about the airline’s mounting debt.
Despite its precarious finances, Air India still controls over 4,400 domestic and 1,800 international landing and parking slots at domestic airports and 900 slots abroad.
Air India started life as Tata Air Services in 1932 when it was founded by JRD Tata. The company was nationalized by the government in 1953. JRD Tata remained its chairman till 1977.
Air India became the first Asian airline to include jet aircraft and began flying to New York in 1960.
Currently, the Tata Group operates Vistara in partnership with Singapore Airlines and AirAsia India in partnership with Malaysia’s AirAsia.