‘Air India is currently suffering losses of around Rs 20 crore per day’
New Delhi: Indian multinational conglomerate Tata group on Thursday took over Air India from the government of India.
“We are totally delighted to have Air India back at the Tata group and are committed to making this a world-class airline,” Tata Sons Chairman N Chandrasekaran told reporters.
Chandrasekaran also met Prime Minister of India Narendra Modi ahead of the official handover. “The strategic disinvestment transaction of Air India successfully concluded today with transfer of 100 per cent shares of Air India to M/s Talace Pvt Ltd along with management control. A new Board, led by the Strategic Partner, takes charge of Air India,” Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey stated.
In October last year, the government had sold Air India to Talace Private Limited- a subsidiary of the Tata group’s holding company- for Rs 18,000 crore.
After that, a Letter of Intent (LoI) was issued to the Tata group confirming the government’s willingness to sell its 100 per cent stake in the airline. Then, the GoI had signed the share purchase agreement (SPA) for this deal.
As a part of the deal, the Tata group will also be handed over Air India Express and a 50 per cent stake in ground handling arm Air India SATS.
Tatas had beaten the Rs 15,100-crore offer by a consortium led by SpiceJet promoter Ajay Singh and the reserve price of Rs 12,906 crore set by the government of India for the sale of its 100 per cent stake in the loss-making carrier.
While this will be the first privatisation since 2003-04, Air India will be the third airline brand in the Tata Group’s stable- it holds a majority interest in AirAsia India and Vistara, a joint venture with Singapore Airlines Ltd.
Tatas would not get to retain non-core assets such as the Vasant Vihar Housing colony of Air India, Air India Building at Nariman Point, Mumbai, and Air India Building in New Delhi.
At present, Air India controls over 4,400 domestic and 1,800 international landing and parking slots at domestic airports as well as 900 slots abroad.
Of the airline’s 141 aircraft that Tatas would get, 42 are leased planes while the remaining 99 are owned.
Over the last decade, more than Rs 1.10 lakh crore was infused by way of cash support and loan guarantees in the loss-making airline to keep it afloat. Currently, Air India is suffering losses of around Rs 20 crore per day.