Tata Sons Wins Air India Bid
GOI on Friday, October 8 confirmed that the Mumbai headquartered Tata Sons has won the 28,000-crore bid to own India’s national carrier Air India. After 68 years, debt-laden Air India has returned to its founders Tata Sons ending a decades-long struggle to offload the money-losing flag carrier. Tata Sons have beaten SpiceJet promoter Ajay Singh to bag Air India. Hailing the decision, Ratan Tata, Emeritus 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 endeavor to build a world-class airline that makes every Indian proud. On this occasion, I would like to pay tribute to J.R.D. Tata, a pioneer of Indian aviation, whose memory we cherish. Apart from a 100 percent stake in Air India and its low-cost arm, Air India Express, the winning bid also includes a 50 percent stake in ground-handling company Air India SATS Airport Services Private Limited, DIPAM Secretary Tuhin Kanta Pandey said. Gratuity and PF benefits will be provided to all employees, he added. Civil Aviation Secretary Rajiv Bansal said that the winning bidder will not retrench any employee for a minimum period of one year and if retrenched after a year, they will have to be offered VRS (voluntary retirement scheme. As of today, there are 12,085 employees in Air India out of which 8,084 are permanent and 4,001 are contractual. Besides, Air India Express has an employee strength of 1,434. Earlier this month both Tata Sons and SpiceJet chairman Ajay Singh (in his private capacity) had placed bids. Reports last month that Tata had won the bid were played down by Union Minister Piyush Goyal, who said then that nothing had been finalised. As of August 31, 2021, Air India has a total debt of ₹ 61,562 crores, out of that ₹ 15,300 will be taken over by the bidder, Pandey stated. So, ₹ 46,262 crores will be transferred to Air India Assets Holding Limited (AIAHL), he added. AIAHL is an SPV formed by the government. Air India has accumulated losses of over ₹ 70,000 crores and the government loses nearly ₹ 20 crores every day. This was the second attempt by the Narendra Modi government to sell Air India. The centre made an attempt in March 2018 but its expression of interest – to sell a 76 percent stake – had no takers over concerns regarding the airline’s burgeoning debt. Edited by PK Chakravarty with inputs from various sources. Image courtesy: Republic India.
