On Friday, in a historic feat, Tata Sons won the bid to buy the debt-laden Air India from the Indian government.
According to Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey, the winning bid was Rs 18,000 crore.
Following the victory, Rata Tata tweeted, “Welcome back, Air India.” Because, for Tata, the achievement is quite nostalgic.
It was JRD Tata who started the airline in 1932.
Back then, it was a private airline company called ‘Tata Airlines.’
The plane carried about 155 passengers and 10.71 tons of mail in the first year.
The weekly mail service route was from Karachi to Ahmedabad to Bombay and then to Madras.
A profitable venture, it amassed a profit of about Rs 60,000 initially.
The Indian government bought a 49% stake in Air India after the Independence.
In 1953, the Indian Parliament passed the Air Corporations Act to buy Air India from JRD Tata.
Later, it became a nationalised carrier. Air India had a good time for the next 40 years.
The early 1990s posed a tough competition for Air India from private airlines such as Jet Airways, Air Sahara, Modiluft and others.
As part of the privatisation move, the Indian government decided to sell a minority 40% stake of the firm.
This was to raise funds. But, it turned futile.
In 2007, Air India got merged with another state-owned airline Indian Airlines. Before the merger, both entities had a total debt of Rs 5,000 crore.
The debt only increased in the following years.
In 2017, India issued an Expression of Interest (EOI) to sell a 76% stake in Air India.
No private companies turned up.
In the third attempt, the government decided to sell a 100% stake in the airline which brought two bidders – Tata Sons and Spicejet Founder Ajay Singh.
And, Tata Sons won the bid for Rs 18,000 crore.