Tata Group-Air India Deal: Tata Will Get A Stake In This Airport! Find Out How?
The Centre had signed a share purchase agreement with Tata Sons in October 2021, for the Air India sale at Rs 18,000 crore. As the Mumbai-based conglomerate is all set to acquire the debt-ridden domestic carrier in January 2022, reports of the Tata Group receiving a stake in Kerala’s Cochin airport is also doing the rounds.
Air India holds a 3% stake in Kerala’s Cochin International Airport, which the conglomerate is reported to acquire. This would make the Tata Group the only carrier to have an operational stake in a major Indian airport.
Tata Group to Acquire A Stake in a Major Indian Airport
According to a Business Standard report, Tata Group will inherit Air India’s stake in Kerala’s Cochin airport, on acquiring the aviation company in January 2022, making the conglomerate the only airline to have an operational stake in a major Indian airport.
Air India owns 3% stake in Cochin International Airport, which has not transferred to Air India Asset Holding Limited (AIAHL), in the pre-sale restructuring plan.
According to the regulatory documents issued by the government, the Cochin airport stake would stay with the buyer. However, Air India’s stake in some other ventures like Hotel Corporation of India, Air India Engineering Services, Airline Allied Services and Air India Transport Services will not be passed on to the Tata Group.
The carrier’s investment in these venture subsidiaries are pegged at Rs 818 crore, while that in Cochin airport is at Rs 45 crore.
Why is Cochin Airport Important?
The Cochin airport sees the third highest count of passenger traffic from international travelers, and is home to the largest share of Indian migrant workers.
Moreover, Air India and Air India Express, along with the private carrier Indigo use the Cochin airport to ferry the lucrative ‘Malayali Gulf traffic’ to multiple locations like Jeddah, Riyadh, Sharjah, Dubai, Abu Dhabi, Doha, Kuwait and Bahrain, among others, adds the report.
This makes the airport a strategic hub connecting India to the West Asian countries.
Once the airport is passed on to the Tatas, the combined stake of SBI, Bharat Petroleum and HUDCO will result to 10% in the airport.