Tata Sons will retake Air India - the airline it founded nearly 90 years ago - as the government accepted its winning bid of Rs 18,000 crore to acquire 100 per cent of the debt-laden state-run carrier. Tata Sons’ subsidiary Talace emerged as the highest bidder for national carrier Air India under the divestment process.
All in all, Tata Sons’ subsidiary Talace will among other assets such as human resources get more 140 aircraft as well as 8 logos.
Notably, after the transaction, Tata Sons will have two full service carriers - Vistara and Air India - along with two low cost airlines - Air India Express and Air Asia India - and a ground and cargo handling company AISATS.
In terms of fleet, Tatas will get Air India’s 117 wide-body and narrow body aircraft and Air India Express’s 24. A significant number of these aircraft are owned by Air India.
It will also get to operate these aircraft on over 4,000 domestic and 1,800 international routes. Air India’s frequent flyer programme has more than three million members.
Furthermore, eight brand logos would be transferable to the Tatas which they have to retail for a period of five years.
In terms of financials, Tatas will need to take care of the Rs 20 crore loss per day that the company suffers. There is also a three-year business continuity clause in the agreement. Tatas would also need to maintain 51 per cent stake in the airline for at least one-year.
Nonetheless, Tatas will be given full operational control of the divested entities.
On the other hand, the transaction does not include non-core assets including land and building, valued at Rs 14,718 crore, which are to be transferred to GoI’s Air India Asset Holding Limited (AIAHL).
Meanwhile, SpiceJet CMD Ajay Singh said: “I congratulate the Tata Group on winning the bid for Air India and wish them all the success. It was my honour and privilege to be shortlisted for bidding for Air India. I am confident that the Tata Group will restore the glory of Air India and make all of India proud.” “I would also like to congratulate the government on the successful disinvestment of Air India. They ran a transparent and flexible process and gave new impetus to India’s disinvestment programme.” N Chandrasekaran, Chairman, Tata Sons said: “At the Tata group, we are delighted to be declared as the winner of the bid for Air India. This is a historic moment, and it will be a rare privilege for our Group to own and operate the country’s flag bearer airline.” “It will be our endeavour to build a world-class airline which makes every Indian proud. On this occasion, I would like to pay tribute to J.R.D. Tata, pioneer of Indian aviation, whose memory we cherish.” Unions Thrilled
Several employee unions of Air India on Friday expressed happiness over the carrier’s earlier owner Tata Sons winning the bid to acquire the national carrier. After a marathon disinvestment process, which was re-initiated in January last year, the government on Friday announced that Tata Sons’ winning bid of Rs 18,000 crore was higher than the reserve price of Rs 12,906 crore set by it.
“We are most happy to hear that it will be the Tata group that is taking us over. We look forward to giving this company our best.
“And, in return, we are sure that the Tata group will ensure that a mutually beneficial working relationship will be kindled over the years,” said a committee member of the Indian Pilots’ Guild, the Boeing pilots’ union of Air India. Separately, the Guild in a tweet said, “@GuildPilots is proud that @airindiain is an airline founded by India’s first licensed pilot and that the airline is going back to the Tata Group... We look forward to being a part of the #tatafamily.”