Air India is the second-largest loss-making public sector enterprise in the country. Last financial year the state career had made a loss of Rs 8,474 crore.
Kochi: Air India is back with the Tata group who once owned it before the country got independence after which the government took control of it in 1953. The Tata, the country’s largest conglomerate, bought the loss making national carrier for Rs 18,000 crore.
The group was the highest bidder. Air India is the second-largest loss-making public sector enterprise. Last financial year the state career had made a loss of Rs 8,474 crore. The Tata group originally set up the airline in 1932. It used to carry mail between Bombay (Mumbai) and Karachi. The government had been making unsuccessful bids to sell the airliner as the losses were piling up. It is unclear about the Tata group’s responsibility of owning up the mammoth debts of over Rs 69,000 crore in 2019.
The government had for years been trying to sell the airline which owns assets including key slots at London’s Heathrow airport, a fleet of more than 130 planes and trained pilots and crew.
Tata sons already operate different services like Vistara and AirAsia. Air India’s bad times started in 1995-96 when budget airlines revolutionized air travel. Coinciding with it was the merger of Air India and Indian Airlines. Galloping fuel price, airport service charges, threats from budget airlines made things worse.
Poor service, outdated policies and practices, bad public relations, lack of professional outlook all added to the woes. An attempt was made to sell 40 percent of its stakes in 2001 with mandatory conditions to associate with a domestic company. Many foreign firms came forward but retreated due to stipulations and aggressive opposition from trade unions. Similar move was made in 2018 to sell 76 per cent stake but failed to attract anyone. Again it came out with another offer to sell the entire stake in 2020 January when Tata Sons and the other from a group of its employees and a US-based investment firm showed interest.
Tatas will have control of the 4,400 domestic and 1,800 international landing and parking slots at domestic airports, and 900 slots at airports overseas. Air India also owns millions of dollars worth of prime real estate.
BSNL is the first largest loss-making PSU which recorded a loss of Rs 14,904 crore last financial year.
