Who will take charge of Maharaja? We will likely to have an answer by tomorrow. Putting an end to years of doldrums, the Union government is likely to announce the winning bid for debt-laden national carrier Air India on Friday, sources told CNBC-TV18. There have been multiple media reports suggesting that Air India is likely to return to its founders after a gap of 68 years. Tata Sons is likely to take charge of Maharaja and its humongous fleet by the year-end, Bloomberg reported earlier. However, the Union government denied the media reports, calling them incorrect. “Media reports indicating approval of financial bids by Government of India in the AI disinvestment case are incorrect. Media will be informed of the Government decision as and when it is taken,” DIPAM Secretary Tweeted earlier.
Air India Returns
The Tata Group-Air India relationship went back to 1932 when legendary industrialist and India’s first commercially licensed pilot Jehangir Ratanji Dadabhoy (JRD) had launched the national carrier. The airline soon expanded to passenger aircraft and in 1938 it started flying overseas. With Columbo being added to its list of destinations, the name of the airlines was changed to Tata Air Services and later to Tata Airlines. The legendary airlines flew support missions for the British Royal Air Force during World War II in Burma. Once the war is finished, war, the airline changed its name to the now-iconic Air India. Then Union government soon took interest in Air India and bough 49 per cent stake in it. With Air Corporations Act in 1953, the government took over the company from Tata Sons and nationalised it.
Considering the mounting debt, the Union government once again invited bids for strategic disinvestment of 100 percent stake of the government of India in the airline in 2020. It also included along 100 percent stake in Air India Express Ltd and a 50 percent stake in Air India SATS. Four bidders expressed their interest, but only Spicejet CEO Ajay Singh and Tata Sons finally remained at the forefront. The government time and again reiterated that the privatisation of the national carrier will be completed in FY22.
The airline posted a net loss of Rs 3,836.78 crore in FY16, Rs 6,452.89 crore in FY17, Rs 5,348.18 crore in FY18, Rs 8,556.35 crore in FY19 and Rs 7,982.83 crore in FY20 as per provisional figures. The total debt of national carrier Air India has risen to around Rs 43,000 crore, officials aware of the matter told CNBC-TV18.
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