Tata Sons is set to take over Air India following years of efforts to privatize the financially troubled and debt-ridden airline. The Indian Government announced earlier on Friday that Tata Sons was selected as the winning bidder to acquire the state-run flag carrier with a 100% equity valued at USD$2.4 billion. This deal includes Tata Sons taking on a USD$2 billion of the total USD$8.2 billion debt that the airline has incurred.
Air India started flight operations back in 1932 as Tata Airlines, under the same Tata Sons that bought the airline today. As services and new routes were continuously added, the Government of India purchased a majority stake in the airline in an attempt to nationalize the airline in 1953.
After almost half a century later, in 2000, the Government tried to re-privatize Air India by selling a 40% minority stake and was met with significant interest from both the Singapore Airlines Group and the Tata Group. However, both parties pulled out due to opposition by trade unions.
Spicejet’s Ajay Singh-led consortium also narrowly missed out on the bid for the national carrier by USD$400 million. Taking to Twitter, the Chairman and Managing Director of India’s second-largest low-cost carrier congratulated the Tata Group on securing the bid for the nation’s flag carrier. Mr Singh added that he is “confident the Tata Group will restore the glory of Air India and make all of India proud.”
 100vw, 810px” data-recalc-dims=”1″><figcaption><em>Air India Boeing 777-200LR registered VT-ALH at Auckland Airport. Photo by Ernest Leung | AeroNewsX.</em></figcaption></figure>
<p>Air India started making significant losses after its merge with Indian Airlines. In the years that followed, a second attempt was made to sell off the airline for a majority 76% stake in 2018. This attempt was also futile as there was no interest since the Indian Government was still retaining 24% control and prospective investors had to inherit the significant debt the airline was dealing with.</p>
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The third and final try came late last year when India’s Government offering a full 100% stake in the national airline. Initially, there was no interest, but following attempts to lower the debt bidders have to take, potential investors were finally enticed to make an offer for the carrier. After a lengthy bidding process and delays due to the COVID-19 pandemic, Tata Sons emerged as the successful bidder.
In a tweet, seen by AeroNewsX, the Chairman Emeritus of Tata Sons, Rata Tata wrote, “Welcome back, Air India.” He added, “While admittedly it will take considerable effort to rebuild Air India, it will hopefully provide a very strong market opportunity to the Tata Group’s presence in the aviation industry.”
Tata Sons is expected to fully acquire the airline and complete the transaction by the end of this year.
Source: https://aeronewsx.com/tata-sons-secures-2-4-billion-bid-to-run-air-india/
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