Maharaja returned to its true heir

Tata won back Air India at a bid of Rs 18,000 Crore, Air India suffered heavy losses being run by the government but now when it purchased by Tata will it grow or fall is the real question, and is this right decision by Tata Tata Group’s holding company Tata sons through its another completely owned firm Talace Pvt. Ltd has submitted a winning bid of Rs 18, 000 crore as the retail enterprise value of the previous government-owned airlines against the reserve price of Rs 12,906 Crore.

Air India has returned to the Tata group nearly after seven decades after years of government struggle to privatize the company.

Currently, Tata group operates in full scale with Vistara Airlines, in a joint venture with Singapore Airlines, and with the budget airline of Air Asia which is a venture with Malaysia’s Air Asia Group.

With the purchase of Air India, Tata group will have a majority of control over national and international skies

The debt:

As per the reports the airline company (till the date of 31 August 2021) Air India is in a debt of Rs 61,560 Crore, as a part of the deal, this amount shall be paid by the selling or the purchasing party (In this case the Government and Tata respectively)

According to the agreement Tata had agreed to pay Rs 15,300 Crore and the rest amount of Rs 46,260 Crores will be paid by the government.

This indicates that the market valuation of the company is way less than its debt and due to the heavy losses the government was eager to privatise it.

Tweet by Ratan Tata:

After the bidding went in favour of the Tata group, Ratan Tata shared his happiness on the social media platform twitter along with the Image of JRD Tata, he said that ‘If JRD was with us today he would have been the happiest, there was a time when under the leadership of JRD, Air India made its mark on the top of the aviation industry, now Tata has the opportunity to be on the top again.’

History of the establishment of the airline: A dream fulfilled

At a young age of merely 15 years in 1919, JRD Tata flew his first lightweight training glider as a hobby; the hobby grew with time, and at the age of 28 years in 1932 with just 2lakh rupees as an investment, during the earlier days the airline was operated from a mud house at near Juhu, Mumbai.

An empty ground near Juhu was used as a runway, which used to fill up with water during rains in that situation JRD used to operate his flights from Pune.

At that time JRD had 2- single-engine light aircraft, 2- Pilots, and 3- Mechanics.

In the first year of being established as a commercial airline in 1933, Tata airlines carried 115 passengers and 11Tonns of Letters.

The first commercial flight was from Karachi to Bombay via Ahmadabad, this flight carried about 25Kg of letters, which came from London to Karachi.

No funds for the new business were provided by the British government they just paid 4aanas for 1 letter to be delivered.

In 1970 Singapore Airlines approached Air India and learned all from flight operation to services and later became one of the top airlines in the world.

On 1^st January 1978, Air India’s Boeing-747 fell off on the Mumbai coast in which all the 213 people including the passengers and flight attendants faced a fatal death.

The nationalisation of the company happened and till 1978 Tata was removed from Air India and Indian Airlines. In February 1978 the then Prime Minister Morarji Desai removed JRD Tata from being the chairperson of the airlines.

This decision of Morarji became a problem for the government in 1978 as they didn’t know how to manage the airlines and due to the mismanagement, the reputation of airlines that used to stand well on a global ranking declined rapidly

With time the condition declined so much that the government decided to sell Air India in 2020.

Now in 2021 Air India is purchased again by Tata.

Tata lost Air India:

Air India was founded by Jahangir Ratan Ji Dadabai (JRD) Tata In the year 1932 but was capitalized by the Indian government in 1953. On 27^th February 1978 when JRD Tata was forced to quit from his post of president in Air India and director of Indian Airlines, he was filled with grief and said that ‘it feels like my beloved child has been snatched away from me’

Important years in the history of the Airline:

In1932: Tata Airlines was established by JRD Tata.

In 1946: The name shifted from Tata Airlines private limited to Air India public limited.

In 1947: The government acquired 49% shares of the company.

In 1948: The airlines flew their first International flight from Mumbai to London on 8^th June 1948.

In 1953: The nationalisation of Airlines happened, domestic flights were named Indian Airlines and International flights were named Air India. 

In 1962: Air India became the first airline in the world with all jet planes.

In 1997: The website of Air India was launched and now people had the facility to book their seats online.

In 2005: For cheaper flights, ‘Air India Express’ was launched.

In 2007: Indian Airlines and Air India merged as one.

In 2012: The airlines saw a rapid downfall and suffered heavy losses, its position dropped from 1^st to 4^th place in the aviation industry.

In 2018: The government announced to sell 76% shares of Air India but didn’t manage to find any buyers.

In 2020: The government announced to sell 100% shares of Air India.

In 2021: Finally, after 68 years, Air India returned to its true owner Tata.

Writer’s view:

It is not wrong to say that Ratan Tata and the other board members of Tata sons have sentiments attached with Air India but the way its market value has depreciated over the years it would be tough for the airline to establish itself in the market again.

So is it a wise decision or will it backfire at Tata sons…

What do you think? Tell us in the comment box below…

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