Life comes full circle as Tata Group emerges top bidder for Air India

Hyderabad: With Tata Group emerging as the highest bidder to acquire the debt-laden state-run carrier Air India, life seems to have come full circle for the salt-to-software conglomerate that is on the verge of winning the bid for the airline that the government took over from it in 1953. JRD Tata pioneered the aviation industry […]

Hyderabad: With Tata Group emerging as the highest bidder to acquire the debt-laden state-run carrier Air India, life seems to have come full circle for the salt-to-software conglomerate that is on the verge of winning the bid for the airline that the government took over from it in 1953.

JRD Tata pioneered the aviation industry in India in 1932 by establishing Tata Air Services, which over the years created connectivity to several cities including New Delhi, Mumbai, Ahmedabad, Hyderabad, Chennai, Karachi, and Colombo. The inaugural flight took off from Karachi to Bombay.

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Tata Air Services was later rechristened as Tata Airlines in 1938, which further was renamed as Air India in 1946, and the Tata Group lost control of the airline after it was nationalised by the government in 1953. JRD Tata who was appointed the company’s first chairman of Air India remained in charge until 1978.

To regain the national carrier, Tata Group outbid the consortium comprising SpiceJet promoter Ajay Singh but the final nod for the sale of Air India is expected to come from a panel of senior ministers led by Amit Shah within a week. Tata’s bid is learnt to be higher than the reserve price set by the government as well as Ajay Singh-led consortium’s bid.

The winner will get the airline’s intangible assets such as 4,400 domestic and 1,800 international landing and parking slots at Indian airports and 900 slots at overseas airports. The winner will also get AI Express and Air India’s 50 per cent stake in AI-SATS ground handling company.

The airline sale comes at a time when the industry is coping to recover from the slump in travel, induced by restrictions aimed at containing the coronavirus pandemic. The Tata Group, which already operates two airlines in the country- low-budget carrier Air Asia India in partnership with Malaysia-based Air Asia, and full-service carrier Vistara in partnership with Singapore Airlines, will strengthen its presence in the sector.

Efforts to auction a majority stake in Air India almost three years ago attracted no bids, forcing the government to relax the terms. It had also extended the deadline multiple times during the pandemic. As per estimates, the government loses nearly Rs 20 crore daily to run Air India, which has accumulated losses of over $9.53 billion.

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