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Background

Corporate Clients wanting to invest

Investments in Bank FDs

Looking to improve their yields

Observations
  • One more glaring reason observed behind Air India’s decline, was its difficulty or reluctance in keeping up with its competitors, who were using smaller aircrafts that were faster, more fuel-efficient and required less servicing in comparison to it’s aging fleet.
  • A CBI investigation in 2011 had revealed that the national carrier was paying for these 111 planes through various loans and its internal resources. A double whammy to the chaos were the agitating employees who were upset with the wage disparities.
  • In 2012, a study commissioned by the Corporate Affairs Ministry recommended that Air India should be partly privatised.
  • At the end 2016, the NITI (National Institution for Transforming India) Aayog proposed the divestment of Air India to the Ministry of Civil Aviation.
  • Government has decided to sell 100% shares of both Air India and its budget carrier Air India Express as well as 50% shares of AISATS (Air India Limited and Singapore Airport Terminal Services).
  • To attract more bidders this time, the government has already decreased nearly ₹30,000 crore (US$4.0 billion) of debts and liabilities in an SPV (Special Purpose Vehicle).
  • On 27 January 2020, the Government released the Expression of Interest (EOI) to invite bidders.
Air india net loss
Results
 Proper Asset Allocation
Return of the prodigal son

Return of the prodigal son

The airliner returns to its original owners after 90 years. It holds a great sentimental value for Ratan Tata, who believes that this acquisition will help the group strengthen its hold on the industry and it will bring back the glory of its past.

 Proper Asset Allocation
Leaders in domestic space

Leaders in domestic space

On the business front, the Tata group already has a strong presence in the industry, with a majority stake in AirAsia India and a joint venture with Singapore Airlines named Vistara Airlines. This deal will make it the second largest domestic carrier in India.

 Proper Asset Allocation
Lucrative airline real estate

Lucrative airline real estate

The Tatas will further have access to over hundred planes, thousands of trained pilots and crew. Plus it will get 4400 domestic and 1800 international landing and parking slots in India apart from the 900 lucrative parking slots worldwide (including Heathrow).