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Updated on: Friday, October 01, 2021, 10:45 PM IST

Tata Sons winning bid for debt-laden Air India incorrect: Centre

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Media reports suggesting that the Tata Group has the winning bid for debt-laden Air India have been debunked by the government.

‘‘Media reports indicating approval of financial bids by Government of India in the AI disinvestment case are incorrect," the finance ministry said on Friday, adding the media will be informed of any decision "as and when it is taken."

Tata Sons' bid was the highest and Rs 3,000 crore more than the minimum reserve price set by a government committee for disinvestment, media reports had indicated during the day.

The Secretary, Department of Investment and Public Asset Management, also refuted the report that a panel of ministers, headed by Home Minister Amit Shah, had approved the Tata bid. The Centre has not yet given its final approval, civil aviation ministry sources said. However, the process of opening the bids has started and it is a confidential matter being dealt with by just four top officers of the ministry and the Air India, sources added.
The government must decide from among two bids received on September 15 from Tata Sons and Ajay Singh, chairman and managing director of another airline, Spicejet.

It is also not yet clear if the government would insist on its share in the earnings of whosoever takes over Air India and whether the two bidders have budgeted for such a payment to the government.


As against the government's reserve price of Rs 15,000-Rs 20,000 crore, Tata's bid is Rs 5,000 crore more than that of Ajay Singh, media reports have esaid. As such Tatas should be the winner and acquire the national carrier it lost in 1953.

The Tata Sons initially owned Air India with JRD Tata at the helm. However, after nationalisation in 1953, the Government of India held a 49% share in the airlines, whereas the Tatas continued to hold the remaining 51%. However, in 1978, former Prime Minister Morarji Desai fired JRD Tata as the chairman of Air India.


Tata Sons already own Vistara Airlines as also a majority stake in Air Asia. Air India suffered hefty losses after its merger in the domestic carrier – the Indian Airlines -- in 2007-08. In March 2020, Minister of State for Civil Aviation told the Rajya Sabha that the accumulated losses of Air India in the past decade were a massive Rs 70,820 crore. The primary reasons cited for the heavy losses were competition from the low-cost private carriers, a high interest burden on debt and a high input cost.


Air India has control over 4,400 domestic and 1,800 international landing and parking slots at domestic airports as well as 900 slots abroad. Air India and Air India Express together have over 141 aircraft and are the largest operators on the international routes. However, the airline is saddled with high debt and accumulated losses. In the last fiscal, its estimated loss was around Rs 9,779 crore.

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Published on: Friday, October 01, 2021, 10:45 PM IST
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