Air India coming back to Tata Group

For a long time, the government has been attempting to sell the underperforming airline, which had accrued a loss of $9.53 billion. The government attempted to auction its controlling ownership nearly three years ago but received no bids, forcing it to relax the terms. During the pandemic, the government had to constantly extend the deadline for bids. Though the announcement is still not official, according to some reports, Tata Group will be claiming the rights after officially being announced to win the bid for Air India Airlines.

Tata sons wins bid for Air India, may bring Maharaja back after 68-year  gap; govt refutes report - The Financial Express

Ajay Singh’s SpiceJet was the biggest competitor in the process, but per Bloomberg, a panel of ministers accepted the Tata company’s overall plan ahead of Singh’s. As per information regarding the subject, it was anticipated that the national airline would be awarded to the potential buyer, with the government considering the putative buyer’s financial situation before announcing the winner.

“The Tatas have put in the highest bid for Air India,” the source claimed, indicating that the winning bid would be announced in the coming days. On the deal, formal political approval is awaited. There will be two levels of political clearance. The Air India-Specific Alternative Mechanism, which includes Home Minister Amit Shah, Finance Minister Nirmala Sitharaman, Commerce Minister Piyush Goyal, and others, operates simultaneously. The Union Cabinet, led by Prime Minister Narendra Modi, must then approve the bill. These approvals are merely formalities, and they are expected to be granted soon.

Tata Group filed an Expression of Interest for Air India | DELHI NYOOOZ

It is also expected that Tata Group will be acquiring 15 percent of the airline’s total debt. As Tata group already owns two airline ventures- Vistara and AirAsia, which are also facing losses. According to Mark D Martin, CEO of Martin Consulting, “Tata’s financial stability and long term return on investment window of a minimum of 25 years should act as the best catalyst to reviving Air India and getting the airline back on its feet. Tata Group intrinsically comes up with the strategic insights that focus on turnarounds, which has been witnessed in the cases of TISCO and Tata Steel, where the group transitioned age-old manufacturing units into modern, efficient, and market viable products.”

Tata Group said to win Air India in historic deal, years in making:  Bloomberg | Business News,The Indian Express

Also, looking back at Tata Group’s history in airlines, JRD piloted the first flight in Indian aviation history in 1932. With a modest capital of Rs 2 lakh provided by a reluctant Sir Dorabji Tata, the then Chairman of Tata Sons, JRD Tata launched the airlines. However, after nationalization in 1953, it was handed over to the government. Until 1977, the Tatas were the main force behind Air India. It re-entered the market in 2014 with the introduction of AirAsia India, and a few months later added Vistara to its network.

LEAVE A REPLY

Please enter your comment!
Please enter your name here