MUMBAI: India’s beleaguered national carrier landed back in the hands of its founders on Thursday, decades after it was nationalised and following years as a monumental burden on the public purse.
Tata, a sprawling family-owned conglomerate with interests ranging from tea to software, is back in charge of Air India after concluding the 180 billion rupee ($2.4 billion) deal. Thursday’s handover marked the end of a long search for a buyer by India’s government, which has spent nearly $15 billion propping up the airline since 2009.
“We are totally delighted that this process is complete and very happy to have Air India back,” Tata Sons chairman N Chandrasekaran told reporters after meeting with Prime Minister Narendra Modi.
“We look forward to working with everyone to create a world-class airline.”
Air India was founded in 1932 and its maiden flight was piloted by JRD Tata, then-chairman of the eponymous firm. The airline offered a slice of the high life, showcasing Bollywood actresses in its advertisements and even commissioning Spanish surrealist Salvador Dali to design its ashtrays.
India’s newly independent government bought a majority stake in 1953 but by the end of the century the venture was struggling to compete with Gulf carriers and no-frills airlines. Successive Indian governments tried to privatise the company but its huge debts and New Delhi’s insistence on retaining a stake — since abandoned — put off would-be buyers.
Tata will take on around a quarter of Air India’s 615 billion-rupee debt, while the remainder will be transferred to a special-purpose vehicle.
In return it gets a fleet of around 120 aircraft, 6,200 airport gate slots in India and a further 900 overseas for a carrier that operates half of all international flights from India. Analysts believe the deal will give the struggling airline a much-needed lift.
“Air India is one of the most neglected government organisations ever. Now that freshness will come back,”; aviation sector analyst Mark Martin told AFP.
“We’ll see an Air India which is more bright, more chirpier, more customer-friendly, more people-oriented.”
Tata Group is one of India’s biggest and oldest companies with a workforce of more than 800,000 people across steelmaking, automobiles and tech. It already owns a 51 per cent stake in rival airline Vistara alongside minority partner Singapore Airlines and a majority stake in AirAsia’s Indian operations. India’s government is planning to sell off a suite of other public assets including oil and gas corporation Bharat Petroleum and insurance agency LIC.
