New Delhi: The government on Wednesday said it is making all efforts to hand over Air India operations to Tata Sons by the end of this year. “We are making all efforts to hand over operations of Air India by the end of December,” Ministry of Civil Aviation Secretary Rajiv Bansal told news agency ANI.
The Tata Group was selected as the winning bidder for India’s flag carrier, ending decades of attempts to privatise a money-losing and debt-laden airline.
Tata Sons, which originally launched Air India with a namesake branding (Tata Air Services) in 1932, bid Rs 18,000 crore as an enterprise value.
According to the deal, Tatas will retain Rs 15,300 crore of Air India’s debt and pay Rs 2,700 crore cash to the government.
The cash-strapped carrier had total debt of Rs 61,560 crore as of August 31, and the debt not absorbed by Tata Sons will be taken over by the government.
The deal didn’t include Air India’s non-core assets like land and buildings, and Tata Sons will have to retain all of the airline’s employees for at least a year.
Currently, Air India has a fleet of 117 wide-body and narrow-body aircraft and Air India Express Ltd. has 24 narrow-body aircraft.
Despite its precarious finances, Air India controls more than 4,400 domestic and 1,800 international landing and parking slots at domestic airports, and 900 slots overseas.
The Tata Group also operates Vistara in partnership with Singapore Airlines and AirAsia India in partnership with Malaysia’s AirAsia.