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Thursday, February 2, 2023

Government to soon announce new owner of Air India

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The last week has been fraught with anticipation as we await the announcement of the winning bid for Air India. On September 15, the government received “multiple” cash bids for Air India in its third attempt to sell the carrier.

Tata Group and SpiceJet CMD are among the contenders. According to senior government officials, Ajay Singh is acting in his personal capacity. According to many persons familiar with the situation, the Tata group is the major bidder to buy Air India.

The winning bid must be accepted by the Air India Specific Alternative Mechanism or the panel constituted for Air India divestment under the supervision of Home Minister Amit Shah, according to the regular operating procedure.

Finance Minister Nirmala Sitharaman, Commerce Minister Piyush Goyal, and Aviation Minister Jyotiraditya M. Scindia are also on the panel. Following presentations by the valuation expert and transaction advisor, the government has decided on a reserve price or minimum bid value for Air India.

Also see: Is the Maharaja returning home? The journey of Air India from private enterprise to re-privatization

The current state of affairs in the aviation and finance ministries suggests that an announcement on the winning bidder for Air India will be made shortly, possibly within the next week. The government intends to give over total control of Air India to its new owners by December.

While various media reports put the reserve price at between Rs 10,000 and 20,000 crore, senior government officials have remained silent on the subject.

If the Tata group becomes the next owner of Air India, it will complete a full circle for the national carrier, as JRD Tata launched it as Tata Airlines in 1932.

When the airline became a public limited company in 1946, it was renamed Air India, and JRD stayed as chairman until 1978. Ratan Tata was also at the helm of Air India from 1986 and 1989.

When the government attempted to sell a stake in Air India in 2001 and 2017, the Tata company was among the potential bidders. If this acquisition is approved, there is a possibility of combining synergies between Tata’s full-service airline Vistara and Air India, as well as between Tata group’s budget carrier AirAsia India and Air India Express.

For the time being, everyone in the aviation industry is interested in learning who the new owner of Air India is and how the divestiture process will be carried out.

MAX resumption

Simultaneously, SpiceJet is preparing to resume Boeing MAX flights next week, most likely beginning on October 5. The airline presently has 13 such planes in its fleet and has already retrained some of its pilots to fly the Boeing 737 MAX.

Due to two tragic accidents involving the aircraft type, the aircraft has been prohibited worldwide since March 2019.

The aircraft has improved fuel efficiency, resulting in decreased operating expenses for the operator. According to industry sources, Jet Airways 2.0 and future carrier Akasa Air are both considering adding MAX aircraft to their fleets.

As a result, the following week is likely to mark the start of a new era for the Boeing MAX in India and the Maharaja airline.

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