Business

TATA-AIR INDIA Deal

by Archana Dubey

The Flash Back

The Story begins back in 1932, An Indian Business Tycoon Sir JRD TATA or Jehangir Ratanji Dadabhoy Tata launched his dream  project, the country’s first commercial airline named TATA-AIR INDIA Deal. 

Sir JRD Tata was born in Paris in 1904, in 1929 he received Indian citizenship, he was an Indian Aviator, Industrialist and chairman of TATA group. His glorified life journey ended in Geneva in 1993 at the age of 89. Sir JRD Tata received two of Country’s Highest civilian awards: Padam Vibhushan” in 1955 and “Bharat Ratan” in 1992. Apart from these awards Sir JRD Tata was awarded “Group Caption” by the Indian AirForce in 1948 and promoted to the “Air Commodore” rank in 1966.  

The TATA Airlines

With Nevill Vintcent, Sir JRD TATA established Tata Airlines in 1932. This was  the first Indian commercial airline service. Till 1953 Sir JRD TATA successfully operated Tata airlines. In 1948 Government of India acquired 49% share of Tata Airlines. 1953 Government of India took over Tata Airlines by passing the Air Corporations Act.

Air India Airlines 

Air India headquarters is Indian Airlines House in Delhi, former headquarter was in Marin Drive Mumbai and was one of the targets in Bombay Blasts 1993.   

The Fleet  

Air India has a big fleet of wide range of aircrafts, some of listed as, 

  • Boeing 707-420 named Gauri Shankar (registered VT-DJJ)
  • Boeing 747-400 named Konark (registered VT-ESM)
  • Airbus A320-200 aircraft
  • Airbus A319,
  • Airbus A320, 
  • Airbus A321,
  • Airbus A330,
  • Narrow body aircraft A320, 
  • Narrow body aircraft A321, 
  • Narrow body aircraft A320 neo
  • Wide body aircraft Boeing 777-200LR, 
  • Wide body aircraft Boeing 777-300ER, 
  • Wide body aircraft Boeing 747-400,
  • Wide body aircraft Boeing 787-8,
  • Boeing 737-800 (Air India Express) 
  • Air India One (also referred to as AI-1 or AIC001, A VIP Aircraft for PM, President) 
  • Boeing 747-400, 
  • Embraer 135 ( Customised boing for business class)

This is the list of aircrafts in the fleet of Air India. There are continuous technical modifications and updates offered by companies from time to time.

Why need to Sale AirIndia

TATA-AIR INDIA Deal started booking losses in 2007 after mergerment with a domestic state owned operator. Government claims that a daily loss of Rs 200m booked afterwards caused high interest burden, strengthening dollar, continuous hike in aviation fuel prices, high airport usage charges, tough competition from low-fare airlines. 

Re-Privatisation of Air India 

The BJP led government tried to sell nearly 40% stake of Air India In 2001 with the condition that an Indian company can buy only this stake. Later in 2018 again the BJP government tried to sell it but it seems no one found the offer unattractive to purchase a highly loss making airline. In Jan 2020 Government offered 100% stake to sale. 

Finally TATA group won the bid in October 2021. TATA group now owned Air India by paying 18,000 crore rupees. Among this amount 15,300 crore will be in the form of loan and 2,700 crore in direct payment. This time Air India has a debt of Rs 60,000 crore in all. TATA group now owns 100% of Air India and Air India Express while 50% stake in ground handling company AISATS airport services Pvt Ltd.   

One more interesting fact is that even after five years of this deal, TATA can sell AirIndia to only an Indian person/ownership So that afterwards AirIndia remains Indian.

Although some Indian politician views are in opposition of this re-privatisation but, on other hand if we go through the financials of ATATA-AIR INDIA Deal, It’s a life saving step for Air India. With the hope of betterment of Air India and its employees this deal may bring fortune.

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