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By the 27th of January, Air India is likely to be handed over to the Tata group. The deal’s final formalities are expected to be completed in the coming days.
The government sold Air India to Palace Private Limited, a subsidiary of the Tata Group’s parent firm, for Rs. 18,000 crores on October 8, last year, following a competitive bidding process.
After that, on October 11, the government sent a Letter of Intent (LoI) to the Tata group, reaffirming the government’s intent to sell its whole ownership in the airline. The Centre signed the share purchase agreement (SPA) for this sale on October 25.
The Tata company will also receive Air India Express and a 50% share in the ground handling subsidiary Air India SATS as part of the deal.
On October 8, Tatas beat a consortium led by SpiceJet promoter Ajay Singh’s offer of Rs. 15,100 crore and the government’s reserve price of Rs 12,906 crore for the sale of its entire stake in the loss-making airline.
While this is the first privatization since 2003-04, Air India will become the Tatas’ third airline brand, with a majority stake in AirAsia India and Vistara, a joint venture with Singapore Airlines Ltd.
Meanwhile, the Indian Pilots’ Guild (IPG) and the Indian Commercial Pilots’ Association (ICPA), two airline pilot unions, threatened Air India’s CMD Vikram Dev Dutt with legal action on Monday, citing “repeated deductions and recoveries” on dues owing to pilots.
“This recovery exercise is illegal,” the two unions said in their letter, “and we demand that this anomaly be addressed and the money due be refunded with immediate effect.”
Furthermore, two other unions oppose the carrier’s January 20 directive to inspect cabin staff members’ grooming and assess their body mass index (BMI) at airports right before their flights.
These unions – Air India Employees’ Union (AIEU) and All India Cabin Crew Association (AICCA) – on Monday wrote to Dutt opposing the order because it is dehumanizing and in violation of rules prescribed by aviation regulator DGCA.