Indian minister denies Tata Group's take over of Air India

Dubai - The Indian government has been trying to sell the airline, which has accumulated losses of over $9.53 billion and has been kept afloat by a bailout since 2012

by Anjana Sankar

Published: Sat 2 Oct 2021, 11:44 AM

Indian Union Minister Piyush Goyal has denied media reports that Indian conglomerate Tata Sons is set to take over the ailing national airline, Air India.

“I don't think there is any such decision that has happened at all,” Goyal, who is in Dubai for Expo 2020, said during a Press briefing held at the Indian Consulate on Saturday.

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After the last bid day, the minister said it will be assessed by the officers and “in due course of time, through a well laid out process, the final bidder will be decided.”

The denial comes after reports emerged on Friday that Tata Sons has been selected as the winning bidder for the debt-laden national carrier.

The Indian government has been trying to sell the airline, the daily operational costs of which drains the exchequer of approximately 200 million rupees (Dh9.9 million) every day. The airline has accumulated losses of over $9.53 billion and has been kept afloat by a bailout since 2012.

Air India was founded by industrialist JRD Tata in 1932, but was later nationalised in 1953.

After a profitable run for decades, the airline’s profits nosedived as other players and low-cost airlines edged Air India out. If the Tata Sons win the bid, the airline will be back in the conglomerate’s kitty after a hiatus of 67 years.

According to reports by Indian Express, Tata group has emerged as the frontrunner to acquire Air India against the bid by SpiceJet.

Representatives of both bidders were called for meetings on two occasions earlier this week, during which the share-purchase agreement was discussed to help them take a long-term view of Air India's various liabilities, and plan the funding accordingly, the newspaper reported.

This is the government's third attempt at selling the national carrier after two unsuccessful tries in 2001 and 2018.

After the second attempt, when not a single bid was received for the loss-making airline, the Centre brought Air India back to the table early last year with significant change in terms of bidding, reported Economic Times.

According to media reports from India, an official announcement is likely to come after the Air India Specific Alternate Mechanism (AISAM), a group of ministers headed by Home Minister Amit Shah, ratifies the winning bid.

Other members of AISAM are Finance Minister Nirmala Sitharaman, Commerce Minister Piyush Goyal, and Civil Aviation Minister Jyotiraditya Scindia.