Tata Sons, the holding company of Indian conglomerate Tata Group, has won a bid for the acquisition of flag-carrier Air India.
The Indian government has long attempted to sell its struggling national airline. A bidding process was delayed several times, most recently due to the Covid-19 pandemic and resulting aviation crisis. Foreign investors were also ruled out, shrinking the group of potential buyers.
Air India is one of the most loss-making airlines in the world, accumulating more than US $1.2 billion in losses in the 2018-2019 business year before the pandemic began. The company will likely require heavy restructuring in order to regain long-term profitability, while at the same time facing strong competition from rapidly expanding low-cost carriers like IndiGo. Air India’s fleet consists of around 120 airplanes, of which less than 90 are currently in service. The sale also includes low-cost subsidiary Air India Express and 50 percent of ground-handling company AISATS.
Tata Sons will now pay approximately US $2.4 billion to take over the national airline and its subsidiaries. The conglomerate had previously owned the airline until 1953, when the Indian government bought a majority stake. Tata also currently owns 51% of Vistara, an airline founded in 2013 as a joint-venture with Singapore Airlines, as well as more than 83 percent of low-cost carrier Air Asia India.
Jakob Wert is an aviation journalist from Germany. He built up the website IFN.news and is the Editor-In-Chief of International Flight Network.