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Tata Sons win Air India bid: The company makes winning bid of Rs 18,000 crore for Air India
Tata Group emerged as the winning bidder to acquire debt-laden state-run Air India, the Department of Investment and Public Asset Management (DIPAM) announced Friday.
Tatas winning bid of Rs 18,000 crore comprises taking over of Rs 15,300 crore debt and paying rest cash, DIPAM Secretary Tuhin Kanta Pandey said.
Tata Sons’ winning bid of Rs 18,000 crore for acquiring 100% shareholding in Air India was higher than the reserve price of Rs 12,906 crore set by the government. Tata Sons beat SpiceJet promoter to bag the “Maharaja”.
Both bidders had quoted above the reserve price, the DIPAM secretary said adding the transaction is planned to be closed by December.
Reportedly, this would be the highest ever amount garnered through privatisation or even the cumulative sum garnered through strategic sale in 1999-00 to 2003-04.
On October 4, a committee of ministers led by Amit Shah, Finance Minister Nirmala Sitharaman, Commerce Minister Piyush Goyal, and Civil Aviation Minister Jyotiraditya Scindia cleared the winning bid for Air India.
Tweeting an old picture of the company’s former chairman JRD Tata getting down from an Air India aircraft, Tata Sons chairman emeritus Ratan Tata wrote “Welcome Back, Air India”
Welcome back, Air India 🛬🏠 pic.twitter.com/euIREDIzkV
— Ratan N. Tata (@RNTata2000) October 8, 2021
The airline was created by Tata in 1932. Tata Airlines was the name at the time. Tata Sons’ aviation subsidiary was established as Air India in 1946, and Air India International began flying to Europe in 1948. Post-independence, the airline was nationalised and was renamed Air India.
Life has come a full circle for Tata, as it was the first company to start Tata Airlines, which was then renamed Air India, and now it acquires it back after 60 years.
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Here is a brief history of Tata’s journey in the aviation sector.
|
Year |
Events |
|
1932 |
JRD Tata receives his pilot’s license in February 1929 and sets India’s first airline, Tata Airlines. He piloted the inaugural flight from Karachi to Bombay (now Mumbai). |
|
1946 |
The airline was renamed Air India and two years later Tata set up Air India International in collaboration with the government. |
|
1951 |
Government nationalises aviation business due to the socialist the regime, and asks JRD Tata to become chairman of Air India |
|
1978 |
JRD Tata removed as chairman of Air India by Prime Minister Morarji Desai. |
|
Early 1980s |
Prime Minister Indra Gandhi reappoints JRD Tata as chairman of Air India. |
|
1993-94 |
JRD Tata passes away, Ratan tata takes over and re-enters the aviation business with India’s new liberalisation policy allowing private sector participation in aviation. He forms a joint venture with Singapore Airlines to start a domestic carrier. |
|
1995 |
A formal proposal with Singapore Airlines is put in place and in the following years, but it never sees the light of the day. |
|
2011 |
UPA government revises FDI guidelines in the aviation industry as foreign airlines are allowed to invest 49% in an Indian airline. |
|
2013 |
AirAsia India company officially formed with Tatas owning 30%, Telstra owning 21% and AirAsia Berhad owning 49% in a joint venture. Tata launches Vistara with Singapore Airlines with the former owning 51% of shares and the latter with 49% of shares. |
|
2014 |
AirAsia India launches first flight between Bengaluru and Goa |
|
2015 |
Vistara launches first flight between Delhi and Mumbai |
|
2019 |
AirAsia and Vistara suffer a multitude of losses, with Vistara’s Moresotargeting the premium international travel segment which grounded Jet in the first place. |
|
2020 |
Pandemic dents businesses of both the airline. Tata submits a bid for Air India. |
|
2021 |
Tata wins the Air India bid. |