More than half a century after India’s biggest conglomerate surrendered control to the state, ending the government’s hold over an airline – Tata Sons Pvt Ltd is all set to take over Air India Ltd, again.
The proposal has been accepted by a panel of ministers from bureaucrats who recommended the bid ahead of an offer from entrepreneur Ajay Singh, who asked not to be identified as the official announcement is yet to be expected in coming days.
This proposal handover proves to be a key victory for PM Modi as he has embarked on a bold privatization plan in order to plyg a widening budget deficit. Before Modi, multiple governments have tried to sell the airline, however, the attempts failed to meet with political opposition or a lack of interest from potential buyers.
Established by India’s first licensed pilot, legendary industrialist and philanthropist J.R.D. Tata, the airline flew mail in the 1930s between Karachi, British-rued India, and Bombay – now known as Mumbai.
Air India became popular with those who could afford to travel through the skies when it went public in the 1940s. However, it lost its edge in both domestic and international markets in the mid-2000s with the advent of private affordable carriers.
Air India hasn’t turned a profit since its 2007 merger with Indian Airlines and is now saddled with a debt of around 600 billion rupees. However, it does have some attractive assets, including prized landing and parking slots at London’s Heathrow airport, which may help Vistara lure business travelers with direct flights to Europe.
