Jagran Explainer: How Tata Sons acquiring Air India would affect the 'Maharaja'

Jagran Explainer: The Centre on Friday announced that the Tata Sons has won the Air India bid to acquire the 'Maharaja' for Rs 18,000 crore. It said that the transaction will be completed by December this year.

By Aalok Sensharma
Sat, 09 Oct 2021 02:25 PM IST
Minute Read
Jagran Explainer: How Tata Sons acquiring Air India would affect the 'Maharaja'
(pic credits: Reuters)

New Delhi | Jagran Business Desk: The Tata Sons on Friday won the big to acquire Air India for Rs 18,000 crore, marking the end of years of struggle to privatise the financially troubled airline, said the Centre. The transaction will be completed by December this year, it said, adding that the government will divest its 100 per cent stake in Air India, Air India Express and 50 per cent stake in ground handling company AISATS.

"I want to congratulate the winning bidders, Talace Pvt Ltd of Tata Sons. They have a great responsibility. I believe they would be able to serve the people of the country with excellent service," Union Civil Aviation Minister Jyotiraditya Scindia was quoted as saying by news agency ANI.

The Tata Sons, which had founded the 'Maharaja' 90 years ago, acquiring Air India will change the dynamics of the national carrier and involves several nuances. Here's everything you need to know about it:

* The Centre has said that the transaction will be completed by this year. This means Tata Sons will get the shares only by December.

* The transaction terms suggest that Tata won't be able to lay off any employee for one year. However, it can offer a VRS in the second.

* All employees of Air India would get gratuity, provident fund and post-retirement medical benefits, as per the transaction deal.

* Tata Sons is free to do mergers, but the owner would need to maintain 51 per cent equity. It also cannot sell the Air India brand or logo for five years.

* The Tata Sons would get access to Air India's 117 wide-body and narrow-body aircraft fleet. It would also get access to Air India Express' 24 narrow-body aircraft.

* Tata Sons would get control of 4,400 domestic and 1,800 international landing and parking slots at domestic airports, as well as 900 slots at airports overseas.

* It must be mentioned here that 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 Air India Asset Holding Limited (AIAHL). AIAHL will also hold Rs 46,262 crore remaining debt of the airline (Rs 61,562 crore total debt, of which Rs 15,300 crore will go to Tatas).

* There won't be any restrictions on government employees now that they will have to travel only by Air India.

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