Ending years of uncertainty and speculations, the story of privatization of Air India reads like the return of the prodigal son. Air India’s return to the Tata fold happened after 68 years of being a government company. The Tatas have regained ownership of the airlines that was started by J.R.D. Tata in 1932. The founder JRD Tata started the airlines as a courier service and named it as Tata Air Services and later Tata Airlines. After World War II, regular commercial service was restored in India and Tata Airlines became a public limited company on 29 July 1946 under the name Air India. The Jawaharlal Nehru government had taken over Air India through nationalisation in 1953. The founder JRD Tata started the airlines as a courier service and named it as Tata Air Services and later Tata Airlines. The Government of India under prime minister Jawaharlal Nehru passed the Air Corporations Act and purchased a majority stake in the carrier from Tata Sons though its founder J. R. D. Tata continued as Chairman till 1977. On February 1, 1978, the then-Morarji Desai government removed Chairman JRD Tata from the boards of Air India and Indian Airlines. He was later reinstated on the boards of both airlines in April 1980 by Indira Gandhi. There was much cheer when Tatas won the bid to acquire debt-laden national carrier Air India for `18,000 crore. The process of Air India’s sale began in July 2017 but the bids ran into rough weather as the government’s offer of only 50% share did not elicit the expected response. Tatas won on the third time when the sale offer was retendered to buy Air India. In order to get rid of the debt-ridden airline, the government decided to sell 100% share of the airline and started its preparation in late-2019. On January 27,2020, Government released the Expression of Interest (EOI) to invite bidder. Of the two bidders-Tata Sons and Spicejet, the former outbid the latter. The sale arrangement includes a cash payment of `2,700 crore and taking over `15,300 crore debt. The deal, which is expected to be completed by December-end 2021, also includes sale of Air India Express and ground handling arm AISATS. Air India had a total debt of `61,562 crore as on August 31. Of this, Tata Sons holding company Talace Pvt Ltd will take over `15300 crore and the remaining `46,262 crore will be transferred to AIAHL. Air India Assets Holding Ltd (AIAHL) -for holding debt and non-core assets of the Air India group. The policy of disinvestment of government undertakings is meant to monetize the assets. India has 348 public sector enterprises and the net worth of the government’s holdings in these firms is around `7 lakh crore, according to government estimates. It does not apply to regulatory authorities, refinancing institutions – many of which have been created through Acts of Parliament – such as major port trusts, Airports Authority of India. According to media reports Narendra Modi government has identified 18 strategic sectors, including banking, insurance, steel, fertiliser, petroleum and defence equipment, where it will retain only a limited presence. Now that Air India is back with its parent- the Tatas- there are expectations that the it will reclaim its reputation again as the flying Maharaja of the skies.
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