The Tata Group of Companies will take over Air India as they pay a staggering ₹ 18,000 crore to the Government of India in an auction. However, as of August 31, Air India still has a debt of ₹61,562 crores. Approximately 75 per cent of this debt or ₹46,262 crores will be given to a special purpose vehicle AIAHL before handing over the loss-making airline to the Tata Group.
Of the ₹ 18,000 crores that Tata is paying to acquire Air India from the government, 15 per cent of it would go to the government, and the rest will go in clearing debt. After handing over Air India to the Tatas, the government officials can book their travel with any airline of their choice which offers them the best price.
The Centre has declared its decision to not tie up with any carrier as announced by the Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey. Pandey said, “The government is not mandating travel by any particular airline, after handing over Air India because there won’t be any state-owned airline [hereafter].”
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The Department of Expenditure (DoE) will issue instructions to the government departments soon regarding official travel. That is, for government-funded travel, employees and ministers can choose any airline. It needs to be done before handing over Air India to the Tatas. Pandey also said that one must not think that Tata acquiring the Air India airline is “getting a cash cow”. If anything, only Tata can pump life and money into an obsolete aircraft to refurbish it.
As per the conditions by the government, the winning bidder, which is Tata having to offer VRS to the 12,085 employees, among which 8,084 are permanent and 4,001 who happen to be contractual employees who will be terminated from the second year onwards.
