Air India returns to Tata after 68 years

The Tata Group will take over state-owned Air India, marking a successful start to the Modi government’s privatisation programme, and bringing an end to the decades-long hunt for a buyer for the airline. The first significant asset sale since 2004 will also see the national carrier return to the Tata fold, after 68 years.

The Tata Group will pay Rs 18,000 crore to acquire Air India from the government. Of this, 15% will go to the government and the rest will go toward clearing debt. Holding company Tata Sons bid for Air India through wholly owned unit Talace. The airline that Tata acquires will carry debt of Rs 15,300 crore, with the rest being taken on by the government. The combine – Air India and the Tata carriers – will be No. 2 in domestic market share after IndiGo. Air India is the country’s biggest overseas carrier.