Air India is back to its rightful home after 68 years under the government. In October 2021, Tata Sons signed the final signature needed to win the Air India bid by submitting a bid of Rs. 18,000 crores. Tata Sons will now be taking over not just the airline but also its debt. But hope is running high, and it is expected that Tata Sons group will help revitalize the airline in the long run.
History of Air India
Air India, formerly known as Tata Airlines during the pre-independence era, was the brainchild of JRD Tata. He started the airline back in 1932, which made it the first airline in India. The airline began as an airmail carrier and then, later on, became a domestic airline. After India got its independence, the airline was converted into a public company as part of the nationalization process and was renamed Air India.
Bidding war
Air India began its journey as the airline that we are familiar with today by offering domestic and international flights. But unfortunately, there were turbulent times ahead for the company as Air India began to run on a loss, and by 2018, the government could not hold on to the debt-ridden airline and tried to sell it, but there was no bidder. Again, in January of 2020, the government invited interested bidders for the airline but was unsuccessful. After several extensions of deadlines, in October 2020, two bids were received for Air India, one by Tata Sons group subsidiary, Talace Pvt Ltd., and the other by Ajay Singh of SpiceJet. Finally, on 25th October 2021, the government sold Air India back to Tata Sons who will now have a 100% stake over the airline by winning the final Air India bid. The complete takeover process is still ongoing, and it is expected that all the transactions are to be completed by December, 2021.
The future of Air India
Right now, the future of Air India is at the hands of Tata Sons. Air India will be the third airline owned by Tata. They have been running two other budget airlines, AirAsia and Vistara, with relative success. And we all know that with experience comes knowledge, so it can be assured that Air India will be benefiting from Tata’s experience of running a successful airline. The company also expects to retain all Air India employees for a year. After which, any employee that needs to be removed will be asked to retire under the Voluntary Retirement Scheme (VRS).
With Air India now under the wings of the Tata Sons group, it might go up against domestic airlines like IndiGo which has been dominating the field for a while.
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Conclusion
Tata Sons winning the Air India bid brings the story of the airline back to a full circle. From JRD Tata establishing Air India as the first airline in India to being given to the government and then returning to the Tata Group. Air India has a long runway ahead to be profitable again, and whether that happens or not, only time will tell. But for now, Air India is ready to soar into the clouds once again.
