Government sells Air India
to Tata conglomerate, the highest bidder with $2.4 billion
By
-
9 October 2021
Indian giant
conglomerate Tata is buying back Air India, 89 years after founding it as Tata
Air and half a century following its nationalisation, the government said
Friday.
The
$2.4-billion deal marks the end of a lengthy effort to privatise the heavily
indebted flag carrier that has eaten up $14.7 billion in public money since
2009. Tata won over the SpiceJet consortium led by Ajay Singh.
The national
carrier has been incurring losses ever since its merger with Indian Airlines in
2007. However, it took over two decades and as many as three attempts for Air
India to finally change hands. The Tata deal includes 100% of the Air India
Express subsidiary.
The airline
was founded in 1932 with the first flight piloted by Tata’s eponymous chairman
himself JRD Tata, flying mail and passengers in a single-propeller de Havilland
Puss Moth from Karachi to Bombay via Ahmedabad.
The airline
was nationalised in the 1950s.
“Welcome
back, Air India,” Tata’s patriarch chairman emeritus Ratan Tata tweeted on Friday,
while admitting it “would take considerable
effort to rebuild” the company.
The airline
at one time “gained the reputation of being one of the most
prestigious airlines in the world. Tatas will have the opportunity of regaining
the image and reputation it enjoyed in earlier years,” he said.
Tata Group,
one of India’s biggest and oldest companies, employs over 800,000 people in 100
countries.
Buying back
India’s biggest international airline – domestically IndiGo is number one – is
part of ambitious plans. Tata owns 51 percent in Indian airline Vistara –
Singapore Airlines holds the remaining 49 percent – as well as an 84-percent
stake in AirAsia India, all of which Tata will now try to bring together.
Air India
comes with a fleet of around 120 aircraft in addition to 4,400 domestic and
1,800 international landing and parking slots at domestic airports, and 900
slots at airports overseas.
Air India
operates 50 percent of all international flights from India.
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