The Tata Group took over state-owned Air India, marking a successful end to the government’s bid to privatise the national carrier after having failed to sell a majority stake in it in 2018.
But what makes this announcement historic and what are some of the key takeaways.
- Tata Sons won the bid to bag debt-laden Air India with a winning bid of Rs 18,000 crore.
- Tata Sons will acquire Air India, 50 per cent of Air India-Sats, and Air India Express. The government will get ₹ 2,700 crore in cash from the Air India sale. The rest is the government’s debt, which Air India will take over.
- The finance department assured that there will be no sacking of the employees for a year.
- Air India employees will be given a voluntary retirement scheme or VRS in the second year and there will be no retrenchment in the first year.
- To keep Air India flying, the government loses 20 crore every day and the accumulated loss is now over 70,000 crore.
- After five years, Tata Sons can transfer the brand but only to an Indian person so that the brand – Air India – remains Indian in perpetuity.
- Tatas have a long history with the national carrier. JRD Tata founded the airline in 1932 and it was at that time called Tata Airlines.
- The long-awaited Air India divestment is being heralded as one of the biggest reforms by the Narendra Modi government. The earlier attempt in 2018 didn’t find any takers.
- At present, the Tata Group operates Vistara in partnership with Singapore Airlines and AirAsia India in partnership with Malaysia’s AirAsia.
- Air India Returned to Tata after 68 years.