New Delhi: After a 68-year hiatus, heavily indebted Air India returned to Tatas that the government approved the software conglomerate’s winning bid for the national airline. With this victory, the Aunty Sons took control of 4,400 domestic landing and parking spaces and 1,800 international parking spaces at domestic airports, as well as 900 spaces at overseas airports such as Heathrow in London. Apart from that, the conglomerate would also get 100% of the low-cost branch Air India Express and 50% of AISATS, which provides freight and ground handling services at major Indian airports.Also Read – PF, Tip & VRS: Here’s What To Expect Air India Employees As Maharaja Returns To Tata Sons
Talace Pvt Ltd, a unit of the holding company of the Salt-to-Software conglomerate, made the winning bid of Rs 2,700 crore in cash and Rs 15,300 crore in debt buyback, Tuhin Kanta Pandey, secretary of the Department of ‘investment and management of public assets, said at a briefing Friday. Tatas beat the offer of Rs 15,100 crore from a consortium led by SpiceJet promoter Ajay Singh and the reserve price of Rs 12,906 crore set by the government for the sale of its 100% stake in the loss-making carrier . The transaction is expected to close by December, Pandey added. Also Read – Air India Employees Will Be Retained for 1 Year, VRS in Year 2: Center Requirements List for Tata’s Sons
“Welcome, Air India! “
“The fact that the Tata group wins the bid for Air India is excellent news! While it is true that it will take considerable effort to rebuild Air India, it will hopefully offer a very strong market opportunity for the presence of the Tata group in the aviation industry… Welcome back, Air India! Tata Sons Chairman Emeritus Ratan Tata tweeted. Also read – “Welcome, Air India”: Ratan Tata tweets as Tata Group wins bid for national carrier after 68 years
Welcome back, Air India 🛬🏠 pic.twitter.com/euIREDIzkV
– Ratan N. Tata (@ RNTata2000) October 8, 2021
Maharaja returns home to Tatas | A timeline
- October 1932: Jehangir Ratanji Dadabhoy (JRD) Tata founded the airline and named it Tata Airlines.
- July 29, 1946: Aunty Airlines became a public limited company under the name of Air India.
- March 8, 1948: Air-India International officially incorporated with a 49% stake in GOI capital. The international service was one of the first public-private partnerships in India, with the government owning 49 percent, the Tatas 25 percent, and the public owning the rest.
- March 1953: Air India was nationalized and for the next four decades it remained the prized possession of India, controlling the majority of domestic airspace.
- April 19, 1960: Air-India International enters the era of jets with the entry into service of the Boeing 707s.
- February 1, 1978: JRD Tata has been removed from the boards of Air India and Indian Airlines.
- April 1980: The government led by Indira Gandhi is reinstating JRD Tata on the boards of the two airlines, but not as president.
- 1986: JRD Tata steps down from boards of directors, Rajiv Gandhi government appoints Ratan Tata president of Air India
- 1989: Ratan Tata is stepping down as Chairman of Air India.
- 1994-95: With the opening of the aviation sector to private players in 1994-95 and to private entities offering cheaper tickets, Air India gradually began to lose market share.
- 2000-01: As part of its wider campaign of privatization and divestment, the NDA government led by Atal Bihari Vajpayee attempted to sell a minority stake or 40 percent stake in Air India. Singapore Airlines and the Tata Group have expressed interest in buying the stake, but Singapore Airlines eventually pulled out mainly due to union opposition to privatization. Hence the derailment of the divestment plan.
- 2004-14: The next 10 years of Congress-led UPA governments from 2004 to 2014 did not pursue any privatization programs, including that of Air India. A turnaround plan (TAP) as well as a financial restructuring plan (FRP) were approved for Air India by the previous UPA regime in 2012. Air India has started to incur losses every year since its merger with Indian Airlines in 2007 -08.
- Cut to 2017: The NDA government led by Narendra Modi had put all its weight in the privatization of CPSE since coming to power in 2014.
- June 2017: The Cabinet Committee on Economic Affairs (CCEA) approved in principle the review of the strategic divestment of Air India and its five subsidiaries. A group of ministers or specific Air India Alternative Mechanism (AISAM) has been set up for this purpose.
- March 2018: The government is urging investors in EoI to buy 76% stake in Air India, with the remaining 26% to be owned by the government. The deal would also include 100 percent of Air India Express and 50 percent of the ground handling arm AISATS. The last date to bid was May 14. The buyer was required to take Rs 33,392 crore or nearly 70 percent of the beleaguered carrier’s debt on its books.
- May 2018: No offers received for Air India.
- June 2018: The government decides to slow down the sale of Air India until oil prices drop.
- January 2020: The government launches an EoI for the privatization of Air India. The government will leave Air India completely by selling 100 percent. The deal would also include 100 percent of Air India Express and 50 percent of the ground handling arm AISATS. The deadline for bidding has been extended 5 times until December 14th.
- October 2020: The government softens the deal; gives investors the flexibility to decide how much Air India debt they wish to absorb.
- December 2020: The Secretary of DIPAM said Air India EOI had received “several offers”.
- March 2021: Hardeep Singh Puri, then Minister of Civil Aviation, said: “There is no choice, either we privatize or we close the airline. We are losing Rs 20 crore every day despite Air India making money now. “
- April 2021: The government is launching a financial tender for Air India. September 15, last date for submission of tenders.
- September 2021: The income tax service allows new Air India owners to carry over losses and offset them against future profits.
- September 2021: Tata Group, the promoter of Spicejet Ajay Singh presented financial offers.
- October 2021: The government announces that the Tata group is making a winning bid of Rs 18,000 crore for Air India.