Indian conglomerate Tata Sons has edged out local rival Spice Jet with a US$2.4 billion takeover bid for Air India.
The sale sees the return of Air India to the Tata Group, which launched the airline in 1932, before it was nationalised in 1953.
Along with the carrier’s planes, pilots and subsidiaries, Tata will absorb around a quarter of Air India’s US$9.5billion debt.
It is the debt burden that has stalled the sale of Air India for years, but Tata’s acquisition gives hope to tens of thousands of Air India employees who feared for their jobs.
Ratan Tata, the chairman emeritus of Tata Sons, tweeted, “While admittedly it will take considerable effort to rebuild Air India, it will hopefully provide a very strong market opportunity to the Tata Group’s presence in the aviation industry.”
Several foreign airlines, including Lufthansa, British Airways and Singapore Airlines showed interest in Air India, but withdrew when the government made it mandatory for them to partner with an Indian company to make a bid.
The new owner will be inheriting a fleet of 121 Air India aircraft and 25 planes from subsidiary Air India Express. It will also acquire prized slots at London’s Heathrow Airport.
The Indian government hopes to hand over the airline to the Tata Group by December this year.