Reports say Tata Sons has emerged as the top bidder for Air India’s takeover.
Various sources state that the government plans to complete the handover of the airlines to its new owners by December.
While a political clearance is awaited, as many close to the inside have said that the reports may be incorrect, these approvals are being widely seen as a matter of formality and are expected to be given soon, making way for an official announcement.
“Media reports indicating approval of financial bids by Government of India in the AI disinvestment case are incorrect. Media will be informed of the Government decision as and when it is taken,” tweeted Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM).
While details are still under wraps, the Tata group may be willing to acquire up to 15 percent of Air India’s debt.
Flying Home
It was JRD Tata who founded the Air India, then known as Tata Airlines in 1932. An avid aviator, JRD even piloted the first flight that laid the route for Indian aviation.
The Tata archives records JRDs experience flying the first route for Air India, then called Tata Airlines.
In 1946, the aviation division of Tata Sons was renamed as Air India and, in 1948, the Air India International was launched with flights to Europe, then the only Indian international air service and also among the first public-private partnerships in India, with the government having a 49 per cent stake.
In 1953, Air India was nationalised and for decades was the only international carrier operating out of metros such as Delhi, Mumbai (then Bombay) and Calcutta.
Air India faced numerous problems over the past two decades, accumulating debt that had ballooned to about $9.53 billion. At one point, it was costing the government around ?200 million a day to operate the national carrier.
Earlier in March, then Civil Aviation Minister Hardeep Singh Puri had said that Air India had accumulated a debt of Rs 60,000 crore and the choice was between disinvesting the airline or shutting it down. In April, the government asked potential bidders to put in financial bids. September 15 was the last date for submitting the bids.
With Tata Sons emerging as Air India’s next owners, this developement could come as a relief for the government, if at all the initial reports are to be believed.