Tata group to take control of debt-laden Air India on Friday
The government will hand over the control of debt-laden national carrier Air India to the Tata group on Friday.
Business Standard can confirm that the board of Air India and Tata Sons will meet tomorrow to formalise the handover the process. The existing board of Air India, which includes four functional directors, two government-nominee directors, chairman, and managing director (CMD), will resign and a board, consisting of Tata group executives, will take charge of the airline.
Sources said that from the Tata’s side Nipun Aggarwal, senior vice president at Tata Sons, Saurabh Agrawal, CFO at Tata Sons, Suprakash Mukhopadhyay, group corporate secretary at Tata Sons, Eruch Noshir Kapadia, former CFO at Tata Sons and Sunil Bhaskaran, CEO of AirAsia India are likely to be inducted in the restructured board of the company.
“All of them have the requisite regulatory approvals from the regulators to become members in the board,” said a person aware of the development.
Air India had submitted their closing balance sheet on January 20 to the Tata group for review.
The handover will culminate a long process of government’s attempt to transfer the ownership of the loss-making airline to a private owner. The airline has never made profit since its merger with Indian Airlines in 2007-08 and has reported a loss of Rs 7,017 crore in FY 21.
The salt-to-software conglomerate won the bid for Air India from the government for Rs 18,000 crore on October 8, 2021 after a competitive bidding process. After that, a letter of intent (LoI) was issued to the Tata Group on October 11 and the share purchase agreement (SPA) for the deal was signed on October 25.
The Tata group has meanwhile started the process of familiarisation with Air India’s operational and commercial process. People aware of the development said that an integrated team from Tata Consultancy Services, Tata Steel, TajSATS AirAsia India has started interacting with departmental heads of Air India, including finance operations, in-flight services, catering, and human resources. The changes in the first phase will be small and more to fine tune the existing process and customer amenities.
“There is a focus to change the softer aspect of the product initially like meals, On Time Performance, call centre, cabin service improvements. These are simpler things like identifying and training the crew and rostering the best ones on key sectors like the US and Europe. More improvements, like refurbishment of the cabin and aircraft will come later, after operational takeover,” the person said.
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