Air India's return to the Tata fold happened after 68 years of being nationalised. The Nehru government took over AI through nationalisation in 1953.
Tata Sons emerged as the winning bidder for the national carrier Air India on Friday. Tatas placed a winning bid of Rs 18,000 crore to re-acquire the debt-ridden airlines more than half a century after it was taken control over through nationalisation. Other than acquiring a 100% stake in Air India, the winning bid also includes a 50% stake in ground-handling company Air India SATS Airport Services Private Limited (AISATS).
With this acquisition, the government will take a hit of Rs 28,844 crore. Four bidders entered the race, with the Tatas and Ajay Singh the only ones to make it to the final stages. At present, the Tata Group operates Vistara in partnership with Singapore Airlines and AirAsia India in partnership with Malaysia's AirAsia.
1. Air India became nationalised in 1953
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The government announced on Friday that the Tata Group won the bid to purchase national carrier Air India, the airline founded by JRD Tata in 1932. Air India's return to the Tata fold happened after 68 years of being nationalised. The Jawaharlal Nehru government had taken over Air India through nationalisation in 1953.
2. Tatas and Ajay Singh made to final stages of bidding
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With this acquisition, the government will take a hit of Rs 28,844 crore. Four bidders entered the race, with the Tatas and Ajay Singh the only ones to make it to the final stages. At present, the Tata Group operates Vistara in partnership with Singapore Airlines and AirAsia India in partnership with Malaysia's AirAsia.
3. Air India founded by JRD Tata in 1932
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Air India was founded by JRD Tata in 1932 but in 1947 as India got its Independence, the government bought a 49% stake in the airlines. In 1953, the government bought the remaining stake and Air India was nationalised. Back then, the government had paid Rs 2.8 crore to Tata Group and took over a 100% stake in the venture. JRD Tata however continued to be its chairman till 1977.
4. Airline renamed Air India in 1946
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JRD Tata renamed the airline Air India in 1946 and went public as a joint-stock company. Air India launched its maiden international route with a Bombay-London flight. It was on this flight that its iconic mascot Maharaja was used.
5. Air India International flight to London took off in June 1948
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JRD had proposed to the government that an international service be started under a sister concern, Air India International. The government agreed and Air India International's first flight to London took off in June 1948 with JRD himself on board. Air India became the first Asian airline to induct jet aircraft and started flying to New York in 1960.
6. Air India merged with Indian Airlines in 2007
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By 2007, Air India which flew international flights was merged with the domestic carrier, Indian Airlines, to reduce losses. But it never made a profit since 2007. As of August 2021, Air India's debt was Rs 61,562 crore. Moreover, every additional day that it remains operational, the government suffers a loss of Rs 20 crore or Rs 7,300 crore per year.
7. Tatas to have ownership of Air India, Indian Airlines and Maharajah
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Apart from 141 planes and access to a network of 173 destinations including 55 international ones, Tatas will also have the ownership of iconic brands like Air India, Indian Airlines and the Maharajah. The government aims to complete the transaction by December 2021, when it will transfer its shares and handover the airline to the new buyer.
8. Government liability of Rs 28,844 crore
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The government will absorb the balance debt of Rs 46,262 crore, which will be transferred to a special purpose vehicle (SPV) set up by it- Air India Assets Holding Limited. When adjusted against non-core assets such as land and buildings worth Rs 14,718 crore that will also be parked in the SPV and the cash amount of Rs 2,700 crore from Tatas, the net liability on the government comes to Rs 28,844 crore.
