New Delhi: In a great welcome back home moment, Tata Sons will retake Air India, the airline it founded nearly 90 years back, as the government accepted its winning bid of Rs 18,000 crore to acquire 100 per cent of the debt-laden state-run carrier. Talace Pvt Ltd, a unit of the holding company of salt-to-software conglomerate, made the winning bid of Rs 2,700 crore cash and Rs 15,300 crore in debt takeover, Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management, said at a briefing on Friday.
Tatas beat the Rs 15,100-crore offer by a consortium led by SpiceJet promoter Ajay Singh and the reserve price of Rs 12,906 crore set by the government for the sale of its 100 per cent stake in the loss-making carrier. The transaction is targeted to be closed by December, Pandey said. As per the terms of the transaction, Tatas cannot lay off any employee for one year and can offer a VRS in the second. It is free to do mergers but cannot sell the Air India brand or logo for five years.
Air India will give it access to a fleet of 117 wide-body and narrow-body aircraft and Air India Express Ltd another 24 narrow-body aircraft besides control of 4,400 domestic and 1,800 international landing and parking slots at domestic airports, as well as 900 slots at airports overseas such as London’s Heathrow. Besides, the bidder would get 100 per cent of the low-cost arm Air India Express and 50 per cent of AISATS, which provides cargo and ground handling services at major Indian airports.
Air India has been in losses since its 2007 merger with Indian Airlines. It has the dubious distinction of having the highest number of employees on its rolls per aircraft - its 221 employees per aircraft compared with 127 per plane at Lufthansa, 140 at Singapore Airlines and 178 employees per aircraft. The transaction with Tatas does not include non-core assets including land and building, valued at Rs 14,718 crore, which are to be transferred to the government's Air India Asset Holding Limited (AIAHL).
Jehangir Ratanji Dadabhoy (JRD) Tata founded the airline in 1932. It was called Tata Airlines then. In 1946, the aviation division of Tata Sons was listed as Air India and in 1948, Air India International was launched with flights to Europe. The international service was among the first public-private partnerships in India, with the government holding 49 per cent, the Tatas keeping 25 per cent and the public owning the rest. In 1953, Air India was nationalised.
Civil Aviation Minister Jyotiraditya Scindia said Air India's return to Tatas marks a new dawn for the airline. “I hope the airline will continue to deliver on its mission of bringing people closer through its successful operations.” Several Air India employees unions welcomed the takeover of the airline by Tatas. “We are most happy to hear that it will be the Tata group that is taking us over. We look forward to giving this company our best. And in return we are sure that the Tata group will ensure that a mutually beneficial working relationship will be kindled over the years,” said a committee member of Air India Boeing fleet pilots union, Indian Pilots Guild.
Air India has 12,085 employees - 8,084 permanent and 4,001 contractual. Besides, Air India Express has 1,434. In the next five years, about 5,000 permanent employees will be retiring, he said. The next step will be to issue the Letter of Intent (LoI) and then sign the Share Purchase Agreement following which, the conditions precedent would need to be satisfied by the successful bidder, the company and the Government, he added. /BI/
