The Maharajah Airlines & Tata

How would you feel if the company you started was taken by the government and after 68 years it comes back to you with 100% share ?

How many of us know Air India was started by Tata Group in 1932, but in 1947, as India gained Independence, the government bought 49% stake in Air India. In 1953 the government bought the remaining stake and the Air India was nationalized

In 2007, Air India with few international flights was merged with Indian Airlines (Domestic carrier) to reduce the losses. The airlines was poorly run and managed. That was the last time Air India made profit. In 2009, the government spend over Rs. 1,10,000 Crores to make up the loses but it didn't go well

By August 2021, Air India's debt was Rs.61,562 Crores. Everyday Air India suffers a loss of Rs.20 Crores which is Rs.7,300 Crores loss per year

Air India (AI) was sold to Tata Group and the confirmation is released by Indian government on Friday (08.10.2021). After 68 years, Air India is all set to return to the Tata fold. Tata Sons subsidiary Talace Pvt. Ltd emerged as the winning bidder for the national carrier Air India quoting an enterprise value of Rs.18,000 Crores. The government will take a hit of Rs.28,844 Crores

The Tata's will own 100% stake in Air India and 100% in its international low-cost arm Air India Express and 50% in the ground handling joint venture Air India SATS. Tata will own 141 planes and access to a network of 173 destinations including 55 international ones. Tata will also have the ownership of iconic brands like Air India, Indian Airlines and The Maharajah

The government aims to complete the transaction by December 2021. Government will transfer all its share and handover the airlines to Tata. Tata (Talace) has quoted an enterprise value of Rs.18,000 Crores. Of this Rs.15,300 Crores is the debt component and the remaining Rs.2,700 Crores will be cash paid to the government 

Ratan Tata (Chairman of Tata Groups) said in a statement "On an emotional note, Air India under the leadership of Mr. JRD Tata had at one time, gained the reputation of being one of the most prestigious airlines in the world. Tata will have the opportunity of regaining the image and reputation it enjoyed in earlier years"

He also added that it will take considerable effort to rebuild Air India and also at the same time it will provide very strong market opportunity to Tata Group's presence in the aviation industry

Tata sons owns 84% share in Air Asia, which has market share of 5.2%

Tata sons owns 51% stake in Vistara which has market share of 8.3%

Tata sons Air India market share will be 13.2%

Altogether, Tata Sons will hold the market share of 26.7% and the second biggest after Indigo

Air India and Air India Express have 13,484 total permanent employees

Tata Sons will retain all employees for a period of 1 year. In the second year, if anyone has to be removed, they will be offered with Voluntary Retirement Scheme. They will also be provided with gratuity and provident fund benefits. Post retirement medical benefits will be taken care by the government

I personally look forward for a better opportunities and steady growth in the aviation industry going forward.

Have a Great Day

B G Nareshkumar