New Delhi, June 29: After the multi-billion business conglomerate Tata Group, India’s largest private airline – IndiGo – expressed interest in taking over Air India, the $8 billion-debt-laden national carrier. Civil Aviation Secretary RN Chaubey confirmed the informal bid made by IndiGo. He further clarified that few other domestic and international carriers have also sent feelers to the government. Also Read - Amid Lockdown, Here's How IndiGo Starts Twitter Banter With Vistara, Soon Joined by Rival Airlines
The unsolicited interest shown by IndiGo in buying a stake of Air India comes a day after the Union Cabinet gave in-principal approval to the disinvest the national carrier. Also Read - Post April 14, Central Govt Likely to Allow Flight Operations in Staggered Manner
The decision to privatise Air India came in the wake of several years of contemplation by successive governments to offload the airlines, reeling under severe loss. Also Read - 'Proud of You': Pakistan ATC Lauds Air India For COVID-19 Relief Flights
Here are 10 major developments related to the story:
– The liability on Air India is pegged at $8 billion, or approximately Rs 52,000 crore. As of now, Centre has not clarified whether it would completely disinvest from airline or sell-off some stakes of the national carrier.
– Finance Minister Arun Jaitley is expected to chair a committee to finalise the procedure in which Air India would be disinvested. The committee would decide the size of stake to be sold and the manner in which the debts and assets of the carrier would be handled following its privatisation.
– Air India, which was the largest national carrier till two decades back, lost its market share rapidly over the past decade. The carrier now is now preferred by only 13 per cent of domestic travellers, reports claimed. In terms of domestic market share, it has been outmatched by IndiGo, SpiceJet and Jet Airways.
– The Air India crisis escalated in 2012, when the erstwhile government decided to bail it out with a financial package of Rs 30,000 crore.
– The decision to disinvest Air India shows the the commitment of Modi regime to defy the Nehruvian-socialist principles. The move is likely to create resentment among the employee union, who have protested the move to privatise the airline.
– IndiGo, the carrier with largest market share, is owned InterGlobe Aviation. The company’s shares were trading lower by 3.3 percent on Wednesday, before the reports of IndiGo being interested in acquiring Air India emerged.
– Before IndiGo, Tata Group expressed the interest to buy a stake in Air India. However, the company is yet to issue an official statement in this regard.
– Before Independence, Tata was the sole-stakeholder of the national carrier. The airline was taken over by government of India following independence, as part of the nationalisation drive spearheaded by the then Prime Minister Jawaharlal Nehru.