National carrier Air India sold to Tata Sons

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National carrier Air India sold to Tata Sons

  • India's loss making national carrier Air India has been sold to the Tata group, the country's largest conglomerate.
  • The government has sold the airline to the company, which was the highest bidder at nearly $2.4bn (£1.7bn).
  • The Tata group originally founded the airline in 1932 before it was taken over by the government in 1953.

Brief History of Air India

  • 1932: Tata Sons, helmed by business tycoon JRD Tata, launches Tata Airlines.
  • 1946: It becomes a public company and is renamed Air India.
  • 1948: Government of India acquired a 49% stake in the carrier.
  • 1953: The government nationalises Air India.
  • 2007: Air India merges with Indian Airlines, a government-owned airline which only operated domestic routes.
  • 2007-08: Air India posts a net loss of $4.6 mn.
  • 2018: An attempt to sell a 76% stake in the airline attracts no bidders.
  • 2019: Air India posts a net loss of 12.8bn rupees, its highest since the merger in 2007.

Reason for disinvesting Air India

  • The national carrier had been making losses since it merged with the state-owned domestic operator Indian Airlines in 2007 and relied on taxpayer-funded bailouts to stay operational.
  • The government said it was making a loss of nearly 200m rupees ($2.6m) every day to run the airline.
  • Over the years, the airline blamed high aviation fuel prices, high airport usage charges, competition from low-cost carriers, weakening of the rupee, as well as a high interest burden for its poor financial performance.