After 70 years, the Tata Group on Thursday officially took over the Air India, Air India Express and Air India SATS. The Government transferred 100 per cent shares to Tata’s wholly-owned subsidiary Talace Pvt Ltd shortly after Tata Sons chairman Natarajan Chandrasekaran called on Prime Minister Narendra Modi.
The Government also transferred the management control of the company to the new owners. This completed the process of the Government selling the debt-ridden airline to the Tata Group company. “Your arrival was much awaited,” tweeted the Tata Group soon after the handover.
Expressing his happiness over the development, Chandrasekaran said Tata Group was delighted to have Air India back and was committed to making it a world-class airline. Ratan N Tata joined Chandrasekaran in expressing his “thankful recognition” to the Government and its various departments for the successful completion of this important transaction.
Later Chandrasekaran reached out to employees of Air India asking them to work together to build the airline that the country needs, while asserting that the “golden age” of the carrier lies ahead. In a welcome letter, Chandrasekaran reflected on the airline’s “brilliant past” and said the entire nation is now waiting to see what “we will achieve together”.
Earlier, a new board of directors met formalising the management takeover.
After the Government transferred its shares to the new owner of Air India, the Ministry of Finance in a statement said the Air India strategic disinvestment transaction has been completed on Thursday with the Government receiving a consideration of `2,700 crore from Talace Pvt Ltd.
The Government has retained debt of `15,300 crore in Air India and Air India Express Ltd (AIXL) while 100 per cent shares of Air India, AIXL and the national carrier’s 50 per cent shareholding in AISATS have been transferred to Talace.
It took over two decades and three attempts for the Centre to finally hand over its flagship national carrier Air India.
In a tweet, Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said the strategic disinvestment transaction of Air India has concluded successfully with transfer of 100 per cent shares of Air India to Talace along with management control.
After the Government’s statement, the Tata Group also issued a statement announcing the completion of the transaction for purchase of Air India from the Government.
“The Tata Group takes over management and control of the airline, starting today. The transaction covers three entities – Air India, Air India Express and AI SATS. Air India is India’s flag carrier and premier full-service airline. Air India Express is a low-cost carrier. AI SATS provides a comprehensive suite of ground handling and cargo handling services,” the Tata Group said in a statement.
Acknowledging PM Modi’s commitment to reforms and faith in India’s entrepreneurship spirit, which made this historic transition possible, the Tata Group said, “Our Prime Minister has in action demonstrated what his commitment to minimum government, maximum governance means.”
After the handover of Air India, Tata Sons Chairman N Chandrasekharan said, “We’re totally delighted that this process is complete and happy to have Air India back in the Tata Group. We look forward to walking with everyone to create a world-class airline.”
Earlier Chandrasekaran called on Prime Minister Narendra Modi on Thursday ahead of the official handover of Air India to the Tata Group.
“N Chandrasekaran, the Chairman of Tata Sons called on PM @narendramodi,” the Prime Minister’s Office tweeted, along with a photograph of the meeting. The meeting comes after all the Government representatives of Air India tendered their resignations earlier. Later, Chandrasekaran also visited the Air India headquarters.
In October last year, Tata Group announced the winning bidder for Air India with a bid amount of `18,000 crore. Tatas would pay `2,700 crore cash and take over `15,300 crore of the airline’s debt.
Tata Sons owns 84 per cent share in Air Asia which has a market share of 5.2 per cent. It also has 51 per cent stake in Vistara which has a market share of 8.3 per cent. With Air India under the stable, Tatas could be in control of 26.7 per cent market share and be the second biggest player after IndiGo.
Before the handover process to Tata Group, the Government has notified the framework agreement entered into by and between Air India Ltd and AI Assets Holding Ltd (AIAHL) for transfer of non-core assets of the national carrier post it ceasing to be a public sector company.
AIAHL was set up in 2019, by the Government for holding debt and non-core assets of the Air India group. Four Air India subsidiaries -- Air India Air Transport Services Ltd (AIATSL), Airline Allied Services Ltd (AASL), Air India Engineering Services Ltd (AIESL) and Hotel Corporation of India Ltd (HCI) --along with non-core assets, painting and artefacts, and other non-operational assets, was transferred to the SPV.
Meanwhile, a consortium of lenders led by the State Bank of India (SBI) has agreed to provide loans to Tata Group for the smooth operations of loss-making Air India. Tata Group, which won the bid to acquire the national carrier along with Air India Express and 50 per cent stake in AISATS in October last year, is expected to formally takeover the airline on Thursday.
Jehangir Ratanji Dadabhoy (JRD) Tata founded the airline in 1932 and named it Tata Airlines. 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.
