Air India: Tata Group Wins Competitive Bid To Acquire Air India, What Do They Gain From The Deal?

Tata Group acquired Air India with a winning bid of Rs 18,000 crore. Before 1953, the airline was with Tata Group.

(File Photo)

Tata Group has acquired Air India, an Indian airline founded nearly 90 years ago. Air India was founded by Tata Group in 1932. In 1953, the Government of India passed the Air Corporation Act, after which Air India was nationalised and went to the government. 

Air India bought for Rs 18,000 crore

Tata Group has made a winning bid Rs 18,000 crore. The other player in the race was SpiceJet promoter, Ajay Singh, who bid Rs 15,100 crore. Thus, Tata Group won Air India by a margin of more than Rs 2,900 crore. Tata Group will also have to pay Air India's outstanding debt of Rs 15,300 crore.    

Ratan Tata sends heart warming tweet

After buying Air India, Tata Group Chairman Ratan Tata tweeted an emotional tweet and captioned it as 'Welcome Back, Air India'.

 

Tata Group expects loss-making national carrier Air India to be in a better position once again. Tata Group already operates two airlines - Vistara, a joint venture with Singapore Airlines. The second is AirAsia India. Tata Group has another airline IndiGo. The combined market share of the three airlines is currently 26.9 per cent. The Tata Group acquisition has brought cheer among the Air India employees as they were looking forward to a final deal for a very long time.

What Tata Group gains from Air India acquisition

• Air India will give Tatas more than 100 aircraft, thousands of trained pilots, lucrative landings and parking slots worldwide.
• The airline will give Tatas control of 4,400 domestic and 1,800 international landing and parking slots at domestic airports. 
• Tata Group will also get 900 slots at airports abroad, the most lucrative of which is at Heathrow in London.
• It will acquire a 100 per cent stake in low-cost Air India Express and a 50 per cent stake in AISATS, which provides cargo and ground handling services at Indian airports.
• According to Rajiv Bansal, Secretary, Ministry of Civil Aviation, Air India has 12,085 employees. Of which 8,084 are permanent employees and 4,001 are on contracts.  In addition, Air India Express has 1434 employees.