The Indian government is expected to approve Tata Group’s bid to take control of Air India Ltd.
Air India, despite being one of the world’s oldest airlines with vast route coverage, struggled miserably due to poor management, interference, a high jobs ratio, free subsidies to public employees, and a slew of other negative factors.
Earlier Civil Aviation Minister Hardeep Singh Puri declared that Air India would be completely disinvested, adding that there is only one option: disinvestment or shutting down the airline.
“We’ve decided that Air India will be 100% disinvested. The choice isn’t between disinvestment and non-disinvestment, it’s between disinvestment and closing down. Air India is a first-rate asset but has an accumulated debt of Rs 60,000 Crore. We need to draw the slate clean”
Hardeep Singh Puri said.
Emotional Connection Between Tatas And Air India
Former Air India director Jitender Bhargava stated in a Bloomberg TV interview on Wednesday that Tata Group has the cash and resources to bring the airline back to life.
“Tatas have been very, very passionate about Air India,” Bhargava said. “J.R.D. Tata on record has said that this is his only creation, the rest of the Tata companies came to him and he was only managing them. So there was a lot of passion, lot of emotional connection between Tatas and Air India, and that has made them bid for it.”
Who Are The Other Bidder?
Tata Sons Ltd. And Ajay Singh, the owner of SpiceJet Ltd. Are the other bidders who submitted a bid for Air India. The results will be announced early this Wednesday.
“When the government acquired Air India, they gave Tatas a pittance. There’s no rationale for the government of India to start looking for huge sums of money as compensation,” he said.
According to Bhargava, any new owner will have to modernise Air India’s as well as inject new ways and talent.
“If you look at the last 18 years, they’ve put at the helm of Air India bureaucrats with virtually no knowledge of the aviation industry,” he said. “It was just a matter of keeping the airline going rather than ensuring that Air India is injected with new talent and the network is expanded. We have often said stagnancy is the first sign of decay.”
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