Air India returns to Tata Sons

Tata Sons will now have ownership of Air India as it acquires 100% of the government’s share in the national carrier. The Mumbai-based conglomerate put a winning proposal of Rs 18,000 crore, of which Rs 2,700 crore will be given in cash, and the outstanding Rs 15,300 crore will be absorbed from more than Rs 60,000 crore deficit the airline had as of August 31, 2021. In 1953, the government had acquired the airline from the Tata Group, which established the carrier as Tata Airlines in 1932. Secretary, Department of Investment and Public Asset Management, Tuhin Kanta Pandey, told the media that Talace Pvt Ltd, a unit of Tata Sons, the owner firm for the conglomerate, will procure 100% of Air India. In the following steps, the letter of intent will be released, and the share-purchase deal will be signed, and the transaction is likely to close by December-end this year. Air India and its affiliate firms had a consolidated debt of Rs 61,562 crore as of August 31. Of this, the Tatas will acquire debt of Rs 15,300 crore. The outstanding Rs 46,262 crore debt will go to Air India Assets Holding Ltd (AIAHL), a special purpose vehicle. Approximately Rs 14,000 crore of this debt will be withdrawn by the government by monetising some of its assets like real estate, while the remaining will be infused by the exchequer. Since 2009-10, the government has invested Rs 1.10 lakh crore to help Air India. During 2019-20, Air India incurred an operational loss of Rs 8,743.59 crore. In 2020-21, when the industry was hit by Covid-19, Air India recorded a provisional operational loss of Rs 6,555.66 crore, as per the data provided by the Ministry of Civil Aviation to Parliament. Civil Aviation Secretary Rajiv Bansal said the bidding conditions render for the Tatas to employ all employees of Air India for one year from the close of the deal. They can give a voluntary retirement scheme (VRS) in the second year. Image Source Also read: Disinvestment process of Air India on right path: Jyotiraditya Scindia