According to the sources, the board members of Air India have been asked to resign from their designation last week and as the events unfold, it is expected that resignation will take place at their last meeting scheduled next month. Tata Group is all set to take over the airline in the month of January next year as reported earlier and the resignation will take place prior to that.
The Current Scenario
An airline official who has requested to be anonymous has informed that seven board members were asked to resign. These members include four functional directors, two government nominee directors, chairman, and managing director (CMD). He further informed that the board members have to resign before the transition of power takes place and the board members were asked for their resignation on November 15 at a meeting.
Last month, the share purchase agreement was signed between Tata Group and the central government. The agreement includes the sale of Air India to Talace Pvt. Ltd. a subsidiary of Tata Group for Rs 18000 Crores. Previously, the bid for the purchase of Air India was accepted by the government where Talace Pvt. Ltd. would pay Rs 2700 Crores in cash and would take over Rs 15,300 Crore of debt in order to fully acquire the airlines.
Former Chief Executive Officer of Alliance Air, C S Subbaih said in a statement that the resignation of board members is just a formality and gives positive indications to the new owner that the process of transition is on track and will be seamless. He informed that the new board will take over the airline as Tata Group is the new owner. He informed that the current board has a CMD, functional directors, and government nominees, who all will have to resign and might be replaced by a new board consisting of an independent director and will probably have officials who have experience at the international stage.
The acquisition of Air India would make it the third airline under the belt of Tata. They already own a majority interest in Air Asia India and Vistara. The ownership of Air India would also give them a total of 4400 domestic and 1800 international landing and parking spots at domestic airports. Moreover, a total of 900 spots will be available at various international airports.