After suffering through heavy storms of the financial crisis, the Government of India finally approved the 100% disinvestment in Air India. The bid was open two weeks ago, and the TATA group won it. The TATA Group holding a company, Tata Sons, through its wholly-owned subsidiary Talace Pvt Ltd submitted a winning bid of Rs. 18,000 as the Enterprise value of Air India. As a consequence, the Tata Group will hold 100% stakes in Air India (A full-service airline operating in the domestic and international market) and 100% in its subsidiary Air India Express (A low-cost air-carrier airline that focuses on short-haul global operations primarily in the middle east market) and 50 % in the joint venture Air-India SATS (airport services on ground and cargo handling).
At present, the total permanent and contractual employee strength of Air India & AIXL is 13,500. On winning the bid and owning 100% shares in Air India, Chairman N Chandrashekhar said, we are proud to run an airline associated with the nation’s name and functions as a national airline in the form of representative of India in the world. We will be making sure to rejuvenate and make Air India a world-class airline in the international market. The TATA Group has 30 companies in ten verticals, operating in more than 100 countries worldwide. The last year’s revenue generation of TATA Group was 103 billion dollars. The company collectively employs 800000 people.TATA Group has three airlines’ associations; Vistara, AirAsia, and Air India. However, the government keeps four Air India subsidiaries- Air India Air Transport Services Ltd, Airline Allied Services Ltd, which runs Alliance Air, Air India Engineering Services Ltd., and Hotel Corporation of India. These Subsidiaries have been transferred to AIAHL.
What will be the take for Air India Employees?
As per records, Air India has 12,085 employees, of which 8084 are permanent, and 4001 are contractual. Along with that, Air India Express has 1,434 employees. As per the terms, Tata as the winner of the bid, will retain all the employees. If any employee needs to be retrenched, they will get the option of a voluntary retirement scheme (VRS) after one year of taking over the completion of the bidder. With the retention of all existing employees, the gratuity, pension fund, and post-retirement medical benefits of existing and past employees will be honored by the TATA Group. Although, post-handover, the free travel of government employees in Air India will be stopped, with that, a free passage to the retired employees will be provided as per the industry practices. However, the outstanding due of Air India, which is Rs 1,332 crores, will be paid by the Government of India as per the report of Justice Dharmadhikari. As per the report, Air India was incurring a loss of Rs 20 crore on a per-day basis, and as of August 31, the Airline was in debt of Rs 61,562 crore. All the eight logos of Air India will now be transferred to the TATA group, where TATA cannot retransfer the logo to any other party for five years. After five years, the logo can be transferred to an Indian only and not to a foreign entity.
Source: tata.com, moneycontrol.com, thetimesofIndia.com