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“Dear Guests!”- Air India Returns to Tata Group

On Thursday, January 27, the Department of Investment & Public Asset Management of India relocated its shares in Air India along with control and management, to Tata Sons subsidiary, Talace

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Prachi Pisal
Prachi Pisal
Journalism student, covering India.

INDIA: The Tata group has announced the completion of the transaction for the purchase of Air India. Air India is the flag carrier airline of India, headquartered at New Delhi.

On Thursday, January 27, the Department of Investment & Public Asset Management of India relocated its shares in Air India along with control and management, to Tata Sons subsidiary, Talace.

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This relocation includes Air India, Air India Express & a 50% stake of the government in a joint-venture ground handling company Air India SATS.

After this historic event, pilots of the new Air India greeted passengers with special announcements. The announcement goes: “Dear Guests, this is your Captain (Name) speaking. Welcome aboard this historic flight, which marks a special event. Today, Air India officially becomes a part of the Tata Group again, after seven decades. We look forward to serving you on this and every Air India flight with renewed commitment and passion”.

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Commenting on the subject, Chairperson of Tata Sons, N. Chandrasekaran stated, “We are excited to have Air India back in the Tata Group and are committed to making this a world-class airline. I warmly welcome all the employees of Air India to our Group and look forward to working together”.

The deal

In October 2021, Tatas won the bid for 100% shareholding of the airlines for Rs. 18,000 crores. Tata Sons have paid Rs. 2700 crore to the government. Along with taking on a debt of Rs. 15,300 crores, the balance debt of Rs. 62,057 crores have been engrossed by the government.

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Some non-core assets of Air India with a book value of Rs.14,718 crore will remain with the government. The government has a total disinvestment target of Rs.1.75 lakh crore for the financial year 2021-22.

Secretary, Department of Investment and Public Asset Management, Tuhin K. Pandey revealed, “Formalities have been completed. Air India’s disinvestment transaction is now closed. The shares have been transferred to Talace. Cash consideration of ₹2,700 crores has been received and the debt of ₹15,300 crores has been accepted (by Tata Sons)”.

Tatas will acquire Air India’s fleet of 141 planes, possession of brands like Air India, Indian Airlines & the Maharajah. About 13,500 permanent & contractual personnel will have to be retained at least for one year.

For now, the Tata Group owns three airlines along with Vistara & AirAsia India in which it has 51% & 84% stakes respectively. The 24% of the market share in the aviation division is occupied by these three airlines together.

In 2017, talks were going on in the Union Cabinet for the disinvestment of Air India. The following year, the government invited bids for a 76% stake in the airline, failing to attract buyers. In January 2020, the government again invited bids for a 100% stake in the airline. In 2000-01, the Atal Bihari Vajpayee government tried to sell a 40% stake in airlines, which was a failure to attract buyers then. 

History behind the flag carrier airline of India Air India

Air India was founded in 1932, by Bharat Ratna JRD Tata, father of Ratan Tata & chairperson of Tata group then. He piloted the inaugural flight between Karachi & Bombay (now Mumbai).In 1948, the Indian government acquired a 49% stake in the airlines. Finally, in 1953, the airlines were nationalized. It was renamed Air India International & domestic flights were transferred to Indian Airlines.

In 2007, the UPA (United Progressive Alliance) government led by INC (Indian National Congress) party decided to merge the two airlines. Air India, as failed to gain profit for years & years is now back to the Tatas, after seven decades. 

Also Read: Air India Returns to Founder After 68 years


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