All eyes are set on Tata as they have reacquired India’s flagship carrier Air India after a long 68 years when initially Maharaja was nationalized. Tata is required to take control and begin the operations of Air India, Air India Express, and its ground handling company AISATS (in which a 50% stake is with new owners) before January 23rd, 2022. The ‘long stop date’ has been mentioned in the purchase agreement that was signed between the government and the Tata Group.
The future of the Airline
Tata has not released any official statements as to how the operations at the newly acquired airline will go on. The future of Air India remains unknown as to whether Tata will operate as a full-blown mega airline or a low-cost and full-service carrier. There have been no updates on the management structure of the airline and neither the cabin upgrade plans that could be executed.
Earlier the government had announced that Tata will continue the operations at India’s flag-bearing airline Air India after winning the bid in the divestment process. The acquisition has resulted in Tata owning a 100% stake in Air India as well as a 100% stake in its subsidiary Air India Express which is a low-cost carrier airline. Moreover, it will also own 50% in the joint venture Air India SATS which includes airport services on ground and cargo handling.
Part of the deal includes the acquisition of 141 planes of Air India out of which 99 are owned and 42 are leased. This deal would include Tata taking over overcapitalized lease liability on account of operating leases of Rs 9185 crore. Some of these 141 planes are also not in use due to maintenance issues and some are simply obsolete.
The sources have informed that the ‘long stop date’ was agreed upon mutually by both the parties (government and Tata Group) and it is quite unlikely to see any delay in initiation of operations. However, in case of any delay, the agreed ‘long stop date’ can be pushed back with the consent of both parties.
Although, as per the reports, government officials have been working intently to ensure seamless transfer of power before the end of 2021 as to not have any delay in the plans.