N Chandrasekaran, chairman of Tata Sons, met Prime Minister Narendra Modi on Thursday, marking the formal handover of Air India from the government to the Indian multinational conglomerate. 

The Rs 18,000 crore deal had materialised in October 2021 when the government had sold the airline to Talace Private Limited, a subsidiary of the Tata group’s company. 

This was followed by a Letter of Intent issued to the company reaffirming the government’s intention to sell its 100% stake in Air India. 

ANI quoted a senior government official as confirming that the handover would take place on Thursday, “Officially Air India hands over to Tata Group today in the afternoon. Tata Group Chairman N Chandrasekaran will be in the ministries for the official handover process.” 

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AI was started by the Tata Group in 1932, but was nationalised after the government completed its stake in the airline in 1953. It couldn’t trim its losses despite being merged with the domestic carrier, Indian Airlines, by 2007.

Prime Minister Narendra Modi is likely to present the deal as his government’s commitment to reducing its role in the economy and saving taxpayers from paying for daily losses of AI.

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In fact, since 2009-10, the government (and indirectly the taxpayer) has spent over Rs 1.1 lakh crore to either directly make up the losses or raise loans to do so, reports The Indian Express. As of August 2021, AI’s debt was Rs 61,562 crore. AI’s operations cost the government a daily loss of Rs 20 crore, or Rs 7,300 crore per year.

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Currently, Air India serves 42 international destinations. Tata Group already holds around 84% of AirAsia India and 51% of Vistara. 

According to the data updated in 2020, “Air India operates around 101 destinations including 57 domestic operations including 33 countries on four continents around the world,” ANI reported.

As per a Money Control report, Tata Sons would gain ownership of 4,400 domestic and 1,800 international landing and parking slots at domestic airports, as well as 900 slots at foreign airports, as a result of the airline’s divestment.

This will be the first privatisation since 2003-04.