Tata group emerges as the top bidder for Air India; The new owner likely to eliminate the airline’s debt trap

Tata Sons has been selected as the winning bidder for the airline, Air India. A panel of ministers accepted a proposal recommending Tata Sons’ bid for debt-laden state-run airline Air India-Bloomberg reported.

The Tata Group was the one said to be the largest bidder in the tender.  The former director Jitendra Bhargava said he hoped the Tata Group would take control of Air India. Jitendra Bhargava said Tata was able to take over Air India and the group had the assets to do so.  The letter of intent to buy Air India was issued in early September itself. The central government’s announced policy is to sell Air India by the end of this financial year.  Along with Tata, SpiceJet has also submitted a letter of intent to buy Air India.

Union finance minister Nirmala Sitharaman, commerce minister Piyush Goyal and aviation minister Jyotiraditya Scindia were among the members of the committee that evaluated the bids.

Air India was founded in 1932 by the Tata Group.  In 1953, the then Prime Minister Jawaharlal Nehru took over Air India as part of the nationalization drive.  However, JRD Tata wrote a letter to the Prime Minister stating that the government had not listened to them properly.  JRD Tata’s words at the time were that he would see the day when Air India would return to the Tata Group.

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The Tata Group had also expressed interest in the sale of Air India for the first time in 2018 by the central government. But the Center then decided to sell a 76 percent stake. Air India’s total debt is Rs 58,351 crore.  Air India’s current operations are supported by a special financial package provided by the Central Government.  Last financial year alone, the loss was Rs 7,500 crore.

Moreover, Tatas will get control of 4400 domestic and 1800 international landing and parking slots at domestic airports and also will get 900 seats at airports overseas.