Tata Group to acquire Indian national carrier Air India for $2.4bn
The Tata Group is set to Air India, the national carrier of India, for INR 180 billion ($2.4 billion) from the Indian government having emerged as the winning bidder in the latter’s divestment process.
Tata Sons, the holding company of Tata Group, submitted the winning bid through its fully-owned subsidiary — Talace Pvt Ltd.
Interestingly, Air India was founded in 1932 by JRD Tata under the name Tata Airlines. Post-World War II, Tata Airlines became a public limited firm and was renamed Air India.
N Chandrasekaran — Chairman of Tata Sons said: “At the Tata group, we are delighted to be declared as the winner of the bid for AIR INDIA. This is a historic moment, and it will be a rare privilege for our group to own and operate the country’s flag bearer airline.
“It will be our endeavour to build a world-class airline that makes every Indian proud. On this occasion, I would like to pay tribute to JRD Tata, pioneer of Indian aviation, whose memory we cherish.”
Tata will acquire a 100% stake in Air India, which is a full-service airline with international and domestic operations. The acquisition also includes a 100% stake in Air India Express, a subsidiary airline that focuses on international short-haul international flights.
As part of the deal, Tata will also get a 50% stake in Air India SATS, which is a joint venture with gateway services and food solutions provider SATS Limited.
AISATS has been providing airport services in ground and cargo handling since 2008.
Air India and Air India Express have 13,500 contractual and permanent employees.
Tata Group said that the deal enables it to own iconic brands such as Air India, Indian Airlines, as well as Maharajah.
Air India has a fleet consisting of 117 wide-body or narrow-body aircraft, while Air India Express has a fleet comprising 24 narrow-body planes. The Indian national carrier owns a significant number of these aircraft.
International markets account for more than two-thirds of Air India’s total revenues. More than three million people are said to be members of the Air India frequent flyer program.