The Indian state carrier Air India was formally handed over to the Tata group of companies on Thursday afternoon through a formal ceremony held at the Air India house in New Delhi. “Welcome back, Air India,” the Tata Group welcomed the Maharaja back into its family after 69 years, through a tweet from the official handle of the group.
The Central government, which owned Air India till Thursday morning, handed over 100% shares of the airline and management control to the Tata group. The transfer of the airline from the government to the Tata subsidiary group—M/S Talace Pvt Ltd—was attended by Civil Aviation Minister Jyotiraditya Scindia, Department of Investment and Public Asset Management (DIPAM) secretary Tuhin Kanta Pandey, civil aviation secretary Rajiv Bansal and Tata Sons chairman N. Chandrasekaran among other senior officials.
The process included the complete handing over of Air India, Air India Express and the AI SATS to the Tatas. The other non-core assets of the company which include the Air India Transport Services Ltd, Air India Engineering Services Ltd, Airline Allied Services Ltd, Hotel Corporation of India Ltd, paintings, artefact, and immovable properties will be taken care of through an agreement between Air India and a special purpose vehicle (SPV) Air India Assets Holding Limited.
This concluded the long pending strategic disinvestment of the debt-ridden airline which the government was bailing out year after year. The government said that all the shares of Air India held by the government have been transferred to the Tata group along with Rs 15,000 crore debt. Over and above this, the Tata group has paid Rs 2,700 crore cash to the government as part of the disinvestment agreement.
“The strategic disinvestment transaction of Air India successfully concluded today with transfer of 100% shares of Air India to M/s Talace Pvt Ltd along with management control. A new Board, led by the Strategic Partner, takes charge of Air India,” DIPAM secretary said.
Civil Aviation Minister Jyotiraditya Scindia said, “Today’s process proves the government’s ability, and the resolve to carry out disinvestment effectively in non-strategic sectors in the future. Best wishes to the new owners. I am confident that the airline will bloom under their wings, and pave the way for a thriving and robust civil aviation industry in India.”
During the handing over ceremony, Chandrasekaran said: “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.”
Chandrasekaran met Prime Minister Narendra Modi in the national capital before the formal takeover of Air India.
Sources said Tata Group would focus on improving the airline’s on-time-performance. “Tata will make big changes after the formal handover of Air India. The maximum emphasis will be given to ensure that all Air India aircraft fly on time,” sources said.
The Tatas have also planned several other changes. There will be changes in seating arrangements and also the dress of the cabin crew. Tata is a leading player in the hotel business and it will give top priority to improve the quality of food in the airline, sources said.
Air India was founded by the legendary JRD Tata in 1932 and the airline was one of the pioneers in India’s aviation sector and the airline’s history is, in fact, synonymous with the annals of civil aviation in India. But the airline was nationalised in 1953 and taken over by the government.
Air India today has a large fleet of aircraft as part of the airline. The airline has a fleet of around 172 aircraft including 49 wide body aircraft used for long haul flights. It also has 19 ATR aircraft. The airline also has some of the prime landing and take off slots in airports including in United Kingdom, United States.
Last year in October, the Tata Son’s subsidiary M/S Talace Pvt Ltd emerged as the winning bidder for the airline after quoting an enterprise value of Rs 18,000 crore. With the Air India, Tata group now owns three airlines in India, the other two being Air Vistara and Air Asia where the company holds majority shares.
