The government today announced Tata Group as the winning bidder for Air India clearing the way for the cash-strapped national carrier to return to its founder, 68 years after India first nationalized its private airlines in 1953.
The wholly-owned subsidiary of the Tata Group Talace Pvt Ltd put an enterprise value (EV) bid at Rs 18,000 crore, with debt retained at Rs 15,300 crore and a cash component at 2700 crore, to win the takeover bid.
Tata will get Air India’s intangible assets like 4,400 domestic and 1800 international parking and landing slots at Indian airports and 900 slots at airports abroad.
AI had a total debt of Rs 60,074 crore as on March 31, 2019. The new oweber will take on a total debt of about Rs 23,286 crore.
For passengers, this development might mean a welcome change, as Air India may continue its non-stop international long-haul flights, and also see upgrades in the in-flight experience, which had deteriorated over time as the company’s financials were stressed.
The Tata Group is likely to consolidate their airlines business, as they have budget airlines Air India Express and Air Asia India, as well as a full-service airline Vistara in their fold.
While this homecoming will be a joyous moment for the 153-year-old conglomerate, that has held its interests in aviation as a labour of love going back to founder and famed aviation enthusiast JRD Tata, it remains to be seen how the future would fare, as the aviation industry is crippled by the pandemic and yet to latch on to a recovery headwind.
Stay updated with all the insights.
Navigate news, 1 email day.
Subscribe to Qrius