Government of India has sold the public carrier Air India to business conglomerate Tata. Tata Sons Pvt. won the final bid against Spice Jet and the deal was for 18,000 crore rupees ($2.4 billion).
It was Tata that originally launched Air India in 1932. JRD Tata, who was India’s first licensed pilot founded Air India under the name Tata Airlines and its first service was from Karachi to Bombay (now Mumbai).
After the Second World War and India’s Independence, the company became public limited and named Air India. Until now, Indian government has been operating the service.
Air India was considered to be an affordable carrier for the common people, but in the recent years, the company was facing huge loss and debt. The introduction of new low cost carriers also impacted Air India’s business.
The governments especially that under the Prime Minister Narendra Modi, were considering the privatization of the company and save the tax payers’ money. Finally after 88 years, Air India is coming back to the hands of its founders. Tata Sons already owns majority of stakes in AirAsia India and Vistara, a joint venture with Singapore Airlines Ltd.
“Welcome back, Air India,” Ratan Tata, JRD Tata’s successor and chairman emeritus of Tata Sons, said in a tweet.
The transaction is expected to be completed by the end of the year.