Air India takeover: What happens after Tata Group assumes control?

Tata Group’s takeover of Air India is all set to be concluded on Thursday as Chairman N Chandrasekaran made his way to New Delhi to seal the deal. In October 2021, Tata Group was announced as the highest bidder for Air India‘s stake, which was priced at Rs 18,000 crore.

However, multiple questions have popped up as the deal nears finalisation from both parties. What happens immediately after the transfer? How will it impact the travel experience of people? How will the asset distribution be rounded off?

Days before Chairman N Chandrasekaran travelled to Delhi, Tata Group was handed over the final balance sheet of Air India. The balance sheet reportedly had January 20, 2022 as the cut-off date.

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What happens immediately after the transfer?

Air India’s current board of directors, which consists of seven officials, will resign from their positions immediately after all necessary documents have been signed and exchanged. After Tata Group’s officials occupy the board room, all key decisions will be made by them.

How will it impact the travel experience of people?

While not much has been disclosed about how the Tata Group will change the airline, news agency PTI reported unnamed sources that an “enhanced meal service” may be rolled out on major flights– domestic and international.

These include AI687 (Mumbai-Delhi), AI639 (Mumbai-Bengaluru), AI864 (Mumbai-Delhi) and AI945 (Mumbai-Abu Dhabi). One extended flight that connects to the United States may also be on the list.

How will the asset distribution be rounded off?

As Air India will be handed over to the Tata Group, which will expand its airspace dominance by accessing new aviation infrastructure, some on-ground asset handover will be tricky.

Air India Asset Holding Ltd, a Special Purpose Vehicle (SPV) formed by the Indian government, will be given the fixed assets for monetisation. The amount accumulated from this will be used to pay off debt, according to reports from Indian Express.

Also Read: No longer mandatory for government employees to travel via Air India

However, soft assets like artwork owned by Air India have been left out of the monetisation clause and will reportedly be displayed in museums. 

According to reports from Indian Express, the Ministries of Civil Aviation and Culture has been delegated the task of arranging the transfer of the 4,000 pieces of art.