Family scion Ratan tweets: “Welcome back!”
Tata Sons, the holding company of India’s largest conglomerate Tata Group, won the $2.4 billion bid for Air India, the government announced on Friday.
According to The Hindu newspaper, the Tata Group will own 100% stake in Air India as well as its international low-cost arm Air India Express and 50% in the ground handling joint venture. Apart from gaining 8,000 full-time employees, which it must retain for at least a year under the terms of the deal, it also took ownership of 141 aircraft and access to 173 destinations, including 55 international routes.
The Indian government wants to complete the whole deal by December this year, Reuters news agency reported.
The debt-ridden state-run airline returns to the group it was founded by 68 years ago.
Talace Pvt Ltd, a unit of Tata Sons — the holding company for the autos-to-steel Tata conglomerate which owns luxury carmaker Jaguar Land Rover — will acquire 100% of Air India, Tuhin Kanta Pandey, the secretary of the Department of Investment and Public Asset Management, said.
Air India was founded by the same group as Tata Airlines in 1932 but it was nationalised in 1953.
The bid amount includes Tata taking on $2 billion of Air India’s total debt of $8.2 billion, resulting in an equity value for the government of only about $400 million.
Tata currently operates two airlines – Vistara, India’s only other full-service carrier, in a venture with Singapore Airlines as well as budget airline AirAsia India, a venture with Malaysia’s AirAsia Group.
Family scion and emeritus chairman of Tata Sons, Ratan Tata said on Twitter that while it will take “considerable effort” to rebuild Air India’s reputation, it would provide Tata with a strong opportunity in the aviation industry.
“Welcome back, Air India!,” he said in a tweet.
The acquisition will give Tata an additional 4,400 domestic and 1,800 international slots at Indian airports annually, as well as 900 slots at airports overseas, the most lucrative of which is at London’s Heathrow.