Air India: Tata Son’s conglomerate covers $ 2.4 billion takeover | The aviation industry

India’s oldest and largest conglomerate, Tata Sons, will take over the country’s debt – laden national carrier Air India.

Its winning bid of 180 billion rupees ($ 2.4 billion) beat India’s head of SpiceJet, Ajay Singh, who offered 151 billion rupees.

In the announcement of the sale on Friday, the government said Tata would raise 153 billion rupees of the airline’s debt burden of more than 615 billion rupees.

A first sales attempt by the government in 2018 failed to attract any bidders.

The sale marks the return of Air India to Tata Group, a pioneer in Indian commercial aviation when it first launched the airline in 1932, before being taken over by the government in 1953.

Ratan Tata, chairman emeritus of Tata Sons, said in a tweet: “The Tata group that won the bid for Air India is good news! While it will certainly take a lot of effort to rebuild Air India, it will hopefully give the Tata Group’s presence in the aviation industry a very strong market opportunity. ”

In January 2020, the government invited the first expressions of interest for the airline, which operates both domestic and international routes and has accumulated large losses over the past decade.

Tata Group is a comprehensive collection of almost 100 companies that includes the country’s largest car manufacturer, the largest private steel company and a leading outsourcing company. The companies employ more than 350,000 people around the world. Tata bought Jaguar and Land Rover for $ 2.3 billion from Ford in June 2008.

It also operates a budget airline, Air Asia India, in collaboration with the Malaysian airline Air Asia Berhad and the full-service carrier Vistara with Singapore Airlines.

Air India carried more than 18 million domestic passengers in 2019 and has suffered from over-bureaucratic management and political interference when privately owned low-cost airlines took market share. It has suffered losses since the 2007 merger with a state-owned domestic airline, Indian Airlines.

The new owner will receive a fleet of 121 Air India aircraft and 25 aircraft from its subsidiary Air India Express, which operates low-cost flights to more than 30 destinations in India, the Middle East and Southeast Asia.

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