India agrees deal to sell national airline Air India back to business giant Tata

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India’s debt-ridden national carrier Air India will be acquired by its founder Tata Sons, nearly 70 years after it was nationalised.

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Indian conglomerate Tata Group made a winning bid of 180bn (£1.7bn) to reclaim the airline, beating a consortium led by SpiceJet’s Ajay Singh, which had participated in its individual capacity.

In addition to a 100 per cent stake in Air India and its low-cost arm Air India Express, the Tata Group’s winning bid also includes a 50 per cent stake in Air India’s ground-handling company, the government said in a statement. The transaction does not include non-core assets such as land and buildings, and will be transferred to the federal government.


Air India has over 4,400 domestic and 1,800 international landing and parking slots at domestic airports, in addition to 900 at airports abroad. By acquiring Air India, the Tata group has added a third airline to its band as it already holds majority stake in AirAsia and Vistara Airlines.

Tata Group Chairman Ratan Tata shared a picture of his father and Air India founder JRD Tata, titled “Welcome Back Air India”, soon after the deal was announced by the government. Air India was founded in 1932 by JRD Tata as Tata Airlines, and was nationalized in the 1950s.

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This was the Indian government’s second attempt to take down the carrier, which has not turned a profit since 2007, after a failed attempt in 2018. After the first unsuccessful bidding attempt when the federal government failed to place any bids for three years for a 76 percent stake. Earlier, the government had changed the conditions for inviting bids for full stake. It has also changed the terms of the bid.

Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management, said the transaction is expected to be completed by December this year.

As per the deal, the Tata group will retain all existing employees of the carrier for the first year. But in the second year, “they will see who to retain and may also give VRS” [voluntary retirement from service]”, Civil Aviation Secretary Rajiv Bansal said.

The Indian government has lost around 610bn (£5.9bn) to run the airlines, of which 153bn (£1.4bn) will go to the bidder. According to reports, the carrier was losing around 200m (£1,957,222) every day.


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