The loss-making airline Air India will take control of Tata, taking over their debts

Tata Sons from the conglomerate of India’s largest business group, the Tata Group, will take over the long-term loss-making state-owned airline Air India.

The government decided to sell the carrier, Tata offered $ 2.4 billion for the takeover. Air India is the oldest Indian carrier, which was established in 1932. But it is no longer the largest airline as in the past. This is the low-cost carrier IndiGo, which in 2020 had a market share of almost 60%.

The government has been trying to sell Air India for several years. The company has long been in the red, totaling $ 9.5 billion in recent years. The Indian market is considered one of the fastest growing in the coming years. Airlines currently have 130 aircraft. Valuable assets also include slots at a number of airports, where there is an excess of demand over supply.

This is Tata’s third acquisition in the aviation business: the company is operated by Vistara (co-owned by Singapore Airlines) and AirAsia India. At this airline, it cooperates with the Malaysian owner of the entire brand.

The transaction is largely a debt assumption: of the total purchase price of $ 2.4 billion, 2 billion is in debt.

The successful sale of the national airline is a great victory for Prime Minister Narendhi Mody, as it has cost Indian taxpayers an average of almost $ 3 million a day over the past decade.

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