Last Updated on Oct 11, 2021 by Aradhana Gotur
Tata Sons won the bid for the debt-ridden airline – Air India, on 8th October 2021. They had submitted a bid of Rs. 18,000 cr for buying the carrier last month. They are re-acquiring the airline they had handed over to the government more than 50 yrs ago.
Tata Sons won a 100% stake in both Air India and Air India Express, along with a 50% stake in ground handling company Air India Singapore Airline Terminal Services (AISATS). The members of the committee that evaluated the bids were Union Finance Minister Nirmala Sitharaman, Aviation Minister Jyotiraditya Scindia, and Commerce Minister Piyush Goyal.
According to DIPAM Secretary Tuhin Kanta Pandey, Tata’s special purpose vehicle (SPV) Talace Private Limited is the winning bidder.
Mr Pandey added that Air India has a total debt of Rs. 61,562 cr as of 31 August 2021, of which Rs. 15,300 cr would be taken over by the Tata Sons. As a result, a total of Rs. 46,262 cr would be transferred to Air India Assets Holding.
Tata already operates a service carrier – Vistara in partnership with Singapore Airlines. Including this, Tatas will now control over 4,400 domestic and 1,800 international landing and parking slots at domestic airports, as well as 900 slots at international airports.
Civil Aviation Secretary Rajiv Bansal stated that the winning bidder will not lay off any employees for at least a year.
If they are laid off after a year, they must be offered a voluntary retirement scheme (VRS). All workers would get gratuity and Provident Fund (PF) benefits, he noted.
The carrier has finally returned to its founder as Air India was originally called Tata Air Services. It was established in 1932 by JRD Tata, who was in fact India’s first licensed pilot. It was then nationalised in 1953. Tata Sons being the largest conglomerate of the nation has the capability of pouring funds for revamping Air India. This is why it was among the favourite bidders according to the committee. SpiceJet founder Ajay Singh was also one of the bidders.