Mumbai, NFAPost: Salt-to-software conglomerate Tata Group declared as the winner of Air India bid on October 8. The debt-ridden carrier returns to Tata fold after 68 years.
According to industry analyst, Tata group will have an herculean task to manage Air India which has a net debt of Rs 60,000 crore. Tata group patriarch Ratan Tata welcomed the return of the airline to the Tata fold and said the group’s winning bid is great news.
“While admittedly it will take considerable effort to rebuild Air India, it will hopefully provide a very strong market opportunity to the Tata group’s presence in the aviation industry,” Tata said in a statement.
Ratan Tata expressed rejoice over the homecoming moment by recalling Jehangir Ratanji Dadabhoy Tata, who in 1932 started Tata Airlines which became Air India in 1946. He also pointed out that J.R.D Tata would have been overjoyed if he was in their midst when it is happening.
“On an emotional note, Air India. under the leadership of Mr J.R.D Tata had, at one time, gained the reputation of being one of the most prestigious airlines in the world. Tatas will have the opportunity of regaining the image and reputation it enjoyed in earlier years,” he further said.
Ratan Tata is the chairman of Tata Trusts. Tata trusts holds 66% in Tata Sons, the holding company of the Tata group. In a statement, Tata Sons said the group would get ownership of iconic brands such as Air India, Indian Airlines, and the Maharajah.
“We also need to recognize and thank the government for its recent policy of opening select industries to the private sector. Welcome back, Air india! (sic),” he added.
Arvian Research noted that the Tatas quoted an enterprise value of Rs 18,000 crore to successfully bid Air India. “It is a reasonable amount compared with other suiters. DIPAM Secretary Tuhin Kanta Pandey said the Tata’s bid was well above the reserve price set by the government,” states Arvian Research.
Currently, Air India has a fleet of 117 wide-body and narrow body aircrafts and Air India Express has a fleet of 24 narrow body aircrafts. A significant number of these aircrafts are owned by Air India. Air India provides a unique and attractive international footprint.