Bloomberg / New Delhi
Tata Sons Pvt formally took charge of debt-laden Air India Ltd, ending years of failed attempts to sell the money-losing airline that has been kept afloat with billions of dollars of taxpayer money.
“It is indeed noteworthy that the disinvestment process of @airindiain has been brought to a successful conclusion in a time-bound manner,” Aviation Minister Jyotiraditya Scindia said in a Twitter post. That proves the government’s ability and “the resolve to carry out disinvestment effectively in non-strategic sectors in the future.”
The successful conclusion of the deal, India’s first major privatization in nearly two decades, is a big victory for Prime Minister Narendra Modi, who has vowed to steer the state away from running businesses as his administration tries to plug a budget deficit. The move also marks a homecoming for Air India, which was originally launched in 1932 by Tata Group’s former chairman JRD Tata as the nation’s first carrier, flying mail between Karachi, then a part of undivided British-ruled India, and Bombay.
“It’s a very historic day because Air India gets a fresh lease of life under Tata’s control,” said Jitender Bhargava, a former executive director at Air India who’s written a book on the carrier’s downfall. Air India has weaknesses, Bhargava said, but the Tatas have the wherewithal to turn it around. “Air India will not only give Tata the scale, but also the number one position because of its vast network of international operations and a huge chunk of trained pilots and aircraft maintenance engineers,” he added.
The disinvestment of Air India concluded with the transfer of 100% shares of Air India to Tata Sons along with the management control, the department of investment and public asset management said in a tweet. A new board took charge of Air India, it said, without elaborating.
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