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Air India Returns To Tata After 68 Years: 10 Big Points

Air India’s total debt stands at over Rs 60,000 crore (File)

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Tata Sons regained control of Air India – nearly 70 years after its nationalisation – with the government picking up the salt-to-software conglomerate as the winning bidder for the debt-laden state-run airline.

Here’s your 10-point cheatsheet to this big story:

  1. Tata Sons will acquire Air India, 50 per cent of Air India-Sats, and Air India Express. The government will get Rs 2,700 crore in cash from the Air India sale. The rest is the government’s debt, which Air India will take over.

  2. The transaction does not include non-core assets including land and building, valued at Rs 14,718 crore, which are to be transferred to the government’s holding company AIAHL.

  3. Air India’s total debt stands at over Rs 60,000 crore and the government loses nearly Rs 20 crore every day.

  4. Air India employees will be given a voluntary retirement scheme or VRS in the second year and there will be no retrenchment in the first year.

  5. Gratuity and Provident Funds benefits will be provided to all employees.

  6. After five years, Tata Sons can transfer the brand but only to an Indian person so that the brand – Air India – remains Indian in perpetuity.

  7. Earlier this month both Tata Sons and SpiceJet chairman Ajay Singh (in his private capacity) had placed bids to acquire Air India.

  8. This was the second attempt by the Narendra Modi government to sell Air India. The centre had made an attempt in March 2018 but its expression of interest – to sell a 76 percent stake – had no takers over concerns regarding the airline’s burgeoning debt.

  9. At present, the Tata Group operates Vistara in partnership with Singapore Airlines and AirAsia India in partnership with Malaysia’s AirAsia.

  10. The deal completes a full circle as Air India was founded in 1932 under the name Tata Airlines by family scion and aviation enthusiast Jehangir Ratanji Dadabhoy Tata.

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