After long a span of 68 years, the Tata group has finally regained control over Air India which once was founded by the JRD Tata with Tata Airlines which later became Air India. It has been a historic win as the government accepted its bid of 18,000 crores by the Tata group. There were two contenders Tata group and Spice jet, but Tata’s bid was 19 percent more than its rival. The Union Government, on Friday, announced that the bid from Tata has been approved by the Group of Ministers. It is expected that all transfer processes and formalities will be completed by the end of the year. Under the deal Tatas will repay Rs 153 billion out of total Air India debt of RS 615 billion and the government will reimburse the rest of the amount of Rs 422 billion from Air India Asset Holding Company.

What is included in the agreement?

• Tata sons will take over Air India, Air India Express and 50% of Air India-Sats for Rs 18000 crores.
• Government will get Rs 2,700 crores in cash, rest of the government’s debt AI will take over.
• Under this deal, non-core assets, including land and building wich arw valued at rs 14,718 crores are not included.
• In the first year, no staff will be laid off but after that 8k of 13.5k AI and AI Express staff can be offered VRS.
• Tata Sons can sell 49% stake after one year, or transfer brand after 5 years but only to an Indian.

By taking over Air India, and AI Express, Tata group becomes the largest international player from India and the second largest in the domestic aviation field, as Air India and AI Express had 18.8% international market shares. Being a designated Indian Air fleet, it has flying rights and slots at major airports overseas. The Secretary of the Department of Investment and Public Asset Management, Tuhin Kanta Pandey said that Talace Pvt Ltd, a part of Tata Sons, is the holding company for the autos-to steel Tata conglomerate. Also owns carmaker Jaguar Land Rover, which will acquire 100% of Air India.

Let’s go back to history- Air India was initially founded in 1932 as Tata Airlines by Jahagir Ratanji Dadabhoy Tata. In 1953, it was nationalized by the government during Jawahar Lal Nehru’s regime but JRD Tata remained the Chairman of Air India. It was during Morarji Desai’s regime, he was removed from the Chairmanship. It has been enduring losses since it got merged with domestic airline Indian Airlines. In 2013, the Civil Aviation Ministry came up with the idea of its privatization which could save it from losses, and in 2017 the government approved to start the disinvestment process. According to officials, the government loses nearly Rs 200 million every day to run Air India. With lots of speculations and debates, finally, in 2021, the Tata group won the bid.

Overjoyed and extremely emotional by winning the bid, the Tata Sons Chairman Ratan Tata welcomed back Maharaja in a tweet and wrote that Air India will regain its image and reputation once again.