Tata Group officially takes over loss-making Air India...

Tata Group officially takes over loss-making Air India

 International Desk daily-bangladesh.com

 Published: 08:54 PM, 27 January 2022  

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Air India, India’s national carrier, has officially handed over to the Tata Group. The business giant bought the debt-ridden airline in October last year.

Tata Group or Tata Sons paid nearly $2.4bn after the Indian government made the terms of the debt less onerous for the buyer.

The salt-to-steel Conglomerate founded the airline in 1932 before it was taken over by the government in 1953.

The handover brings to an end a years-long attempt to sell Air India, which has racked up losses worth $9.5bn.

Tata Group chairman Natarajan Chandrasekaran met Prime Minister Narendra Modi on Thursday before the handover.

The existing board of directors for the airline has resigned, making way for a new board appointed by the Tata Group.

Air India has many assets, including prized slots at London’s Heathrow airport, a fleet of more than 130 planes and thousands of trained pilots and crew.

Tata Sons already run two airlines in India - Vistara, a full-service carrier in partnership with Singapore Airlines, and AirAsia India, a budget airline in partnership with Malaysia AirAsiaBhd.

Air India had been making losses since 2007 when it was merged with the state-owned domestic operator Indian Airlines. It remained operational due to taxpayer-funded bailouts.

The government said running the airline was incurring losses of nearly “$2.6m every day”.

The airline’s management cited “rising aviation fuel prices” and airport usage charges as well as competition from low-cost carriers, a weakening rupee and the interest burden for its poor financial performance.

Apart from its fleet of over 130 aircraft, the new buyer – Tata Sons – will now have control of the airline’s 4,400 domestic and 1,800 international landing and parking slots at domestic airports, as well as 900 slots at airports overseas. More than two-thirds of its revenues come from its international operations.

According to the aviation ministry, its fixed assets – land, buildings, planes – in March last year were worth more than 450bn rupees ($6bn). - BBC

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